v3.25.4
Taxes (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income before income taxes
($ in millions)
For the year ended December 31:2025 20242023
Income/(loss) from continuing operations before income taxes
U.S. operations (1)
$(236)$(3,405)$(227)
Non-U.S. operations10,564 9,202 8,917 
Total income from continuing operations before income taxes$10,328 $5,797 $8,690 
(1)2024 includes the impact of a pension settlement charge of $2.7 billion. Refer to note U, “Retirement-Related Benefits,” for additional information.
Components of the provision for income taxes by geographic operations and taxing jurisdiction
The components of the income from continuing operations provision for/(benefit from) income taxes by taxing jurisdiction were as follows:
($ in millions)
For the year ended December 31:202520242023
U.S. federal
Current$(1,722)$(335)$560 
Deferred(119)(2,204)(1,371)
$(1,842)$(2,539)$(811)
U.S. state and local
Current$135 $152 $127 
Deferred(130)(335)(162)
$5 $(183)$(34)
Non-U.S.
Current$2,303 $2,301 $1,594 
Deferred(708)203 428 
$1,595 $2,504 $2,022 
Total continuing operations provision for/(benefit from) income taxes$(242)$(218)$1,176 
Discontinued operations provision for/(benefit from) income taxes$(20)$6 $(9)
Total provision for/(benefit from) income taxes$(262)$(212)$1,167 
Effective income tax rate reconciliation
A reconciliation of the statutory U.S. federal tax rate to the company’s effective tax rate from continuing operations was as follows:
(in $ millions)
2025
For the year ended December 31:AmountPercentage
U.S. federal statutory tax rate$2,169 21 %
State and local income taxes, net of federal income tax effect (1)
(130)(1)
Foreign tax effects
    Ireland
         Statutory tax rate difference(310)(3)
         Other70 1 
    Singapore
         Local taxes at a rate different than the statutory rate(185)(2)
         Other55 1 
   Brazil203 2 
   Other foreign jurisdictions656 6 
Effect of changes in tax laws or rates enacted in the current period 308 3 
Effect of cross-border tax laws
   Current GILTI427 4 
   Deferred GILTI168 2 
   Foreign tax credits(285)(3)
   Other(22)— 
Tax credits
   R&D(265)(3)
Changes in valuation allowances (77)(1)
Non-taxable or non-deductible items
   Stock-based compensation(217)(2)
   Other(83)(1)
Changes in unrecognized tax benefits(2,754)(27)
Other adjustments33 — 
Effective tax rate$(242)(2)%

For the year ended December 31:20242023
Statutory rate21 %21 %
Tax differential on foreign income (2)
(13)(3)
Domestic incentives (2)
(7)(5)
State and local (2)
(2)0 
Other (2)
(3)1 
Effective tax rate(4)%14 %
(1)Alabama, California, New Jersey, New York and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category.
(2)2024 includes the impacts of pension settlement charges on tax differential on foreign income, domestic incentives, state and local, and other of (4) points, (3) points, (2) points, and (1) point, respectively. Refer to note U, “Retirement-Related Benefits,” for additional information.
Percentages rounded for disclosure purposes.
Components of deferred tax assets and liabilities
Deferred Tax Assets
($ in millions)
At December 31:20252024
Retirement benefits$1,691 $1,898 
Leases1,224 1,157 
Share-based and other compensation888 796 
Tax losses/credits3,923 3,615 
Deferred income797 790 
Bad debt, inventory and warranty reserves207 198 
Depreciation243 238 
Accruals418 395 
Intangible assets3,341 2,482 
Capitalized R&D4,426 4,185 
Hedging270 — 
Other 994 784 
Gross deferred tax assets18,422 16,537 
Less: valuation allowance1,143 1,223 
Net deferred tax assets$17,279 $15,314 
Deferred Tax Liabilities
($ in millions)
At December 31:20252024
Goodwill and intangible assets$3,305 $3,147 
GILTI deferred taxes1,606 1,200 
Leases and right-of-use assets1,578 1,483 
Depreciation548 438 
Retirement benefits1,473 1,478 
Undistributed foreign earnings321 211 
Hedging — 448 
Other 620 746 
Gross deferred tax liabilities$9,450 $9,151 
Reconciliation of unrecognized tax benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
($ in millions)
202520242023
Balance at January 1$8,875 $8,772 $8,728 
Additions based on tax positions related to the current year316 667 296 
Additions for tax positions of prior years402 452 231 
Reductions for tax positions of prior years (2,843)(955)(457)
Settlements(95)(61)(26)
Balance at December 31$6,655 $8,875 $8,772 
Income taxes paid
Cash paid for income taxes, net of refunds received, by jurisdiction for the year ended December 31, 2025 was as follows:
($ in millions)
For the year ended December 31:2025
U.S. federal
$218 
U.S. state and local
92 
Non-U.S.
Brazil197 
Japan154 
Singapore113 
All other non-U.S.1,174 
Income taxes paid—net of refunds received
$1,948