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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
Note 12 – Income Taxes

Our sources of Income (loss) before income taxes were as follows:
Year Ended December 31,
(in millions)202320222021
U.S. income$10,943 $3,116 $3,401 
Foreign income (loss)56 30 (50)
Income before income taxes$10,999 $3,146 $3,351 
Income tax expense is summarized as follows:
Year Ended December 31,
(in millions)202320222021
Current tax (expense) benefit
Federal$(42)$22 $(22)
State(28)(64)(89)
Foreign(12)(22)(19)
Total current tax expense(82)(64)(130)
Deferred tax (expense) benefit
Federal(2,150)(628)(541)
State(417)77 327 
Foreign(33)59 17 
Total deferred tax expense(2,600)(492)(197)
Total income tax expense$(2,682)$(556)$(327)

The reconciliation between the U.S. federal statutory income tax rate and our effective income tax rate is as follows:
Year Ended December 31,
202320222021
Federal statutory income tax rate21.0 %21.0 %21.0 %
State taxes, net of federal benefit4.2 4.5 4.5 
Effect of law and rate changes(0.1)(5.3)(1.7)
Change in valuation allowance(0.2)(0.8)(10.7)
Foreign taxes0.4 0.7 0.1 
Permanent differences(0.1)(0.2)0.3 
Federal tax credits(0.8)(2.4)(2.5)
Equity-based compensation(0.4)(1.2)(2.6)
Non-deductible compensation0.5 1.2 1.5 
Other, net(0.1)0.2 (0.1)
Effective income tax rate24.4 %17.7 %9.8 %

Significant components of deferred income tax assets and liabilities, tax effected, are as follows:
(in millions)December 31,
2023		December 31,
2022
Deferred tax assets
Loss carryforwards$6,227 $6,641 
Lease liabilities8,355 8,837 
Reserves and accruals1,177 1,526 
Federal and state tax credits426 373 
Other4,033 4,349 
Deferred tax assets, gross20,218 21,726 
Valuation allowance(306)(375)
Deferred tax assets, net19,912 21,351 
Deferred tax liabilities
Spectrum licenses19,006 18,341 
Property and equipment6,142 5,147 
Lease right-of-use assets7,043 7,461 
Other intangible assets350 519 
Other829 767 
Total deferred tax liabilities33,370 32,235 
Net deferred tax liabilities$13,458 $10,884 
Classified on the consolidated balance sheets as:
Deferred tax liabilities$13,458 $10,884 
As of December 31, 2023, we have tax effected federal net operating loss (“NOL”) carryforwards of $5.0 billion, state NOL carryforwards of $1.8 billion and foreign NOL carryforwards of $22 million, expiring through 2043. Federal and certain state NOLs of $4.9 billion generated in and after 2018 do not expire. As of December 31, 2023, our tax effected federal and state NOL carryforwards for financial reporting purposes were approximately $199 million and $636 million, respectively, less than our NOL carryforwards for federal and state income tax purposes, due to unrecognized tax benefits of the same amount. There were no differences in our foreign NOL carryforwards for financial reporting purposes and our NOL carryforwards for foreign income tax purposes as of December 31, 2023. The unrecognized tax benefit amounts exclude offsetting tax effects of $168 million in other jurisdictions.

As of December 31, 2023, we have research and development, corporate alternative minimum tax, foreign tax and other general business credit carryforwards with a combined value of $803 million for federal income tax purposes, an immaterial amount of which begins to expire in 2031.

As of December 31, 2023, 2022 and 2021, our valuation allowance was $306 million, $375 million and $435 million, respectively. The change from December 31, 2022 to December 31, 2023 primarily related to a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions resulting from expiration of the related state tax attributes. The change from December 31, 2021 to December 31, 2022 primarily related to a reduction in the valuation allowance against deferred tax assets in certain foreign jurisdictions resulting from legal entity reorganizations.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are currently under examination by the IRS and various states. Management does not believe the resolution of any of the audits will result in a material change to our financial condition, results of operations or cash flows. The IRS has concluded its audits of our federal tax returns through the 2009 tax year; however, NOL and other carryforwards for certain audited periods remain open for examination. U.S. federal, state and foreign examination for years prior to 2004 are generally closed.

A reconciliation of the beginning and ending amount of unrecognized tax benefits were as follows:
Year Ended December 31,
(in millions)202320222021
Unrecognized tax benefits, beginning of year$1,254 $1,217 $1,159 
Gross increases to tax positions in prior periods19 31 73 
Gross decreases to tax positions in prior periods(39)(65)(123)
Gross increases to current period tax positions256 77 72 
Gross increases due to current period business acquisitions— — 36 
Gross decreases due to settlements with taxing authorities— (3)— 
Gross decreases due to statute of limitations lapse(13)(3)— 
Unrecognized tax benefits, end of year$1,477 $1,254 $1,217 

As of December 31, 2023, 2022 and 2021, we had $1.3 billion, $962 million and $932 million, respectively, in unrecognized tax benefits that, if recognized, would affect our annual effective tax rate. Penalties and interest on income tax assessments are included in Selling, general and administrative and Interest expense, respectively, on our Consolidated Statements of Comprehensive Income. The accrued interest and penalties associated with unrecognized tax benefits are insignificant. It is possible that the amount of unrecognized tax benefits related to our uncertain tax positions may change within the next 12 months.