v3.20.4
Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Years Ended December 31,
202020192018
U.S. income$6,881 $3,826 $4,433 
Non-U.S. income540 2,342 1,953 
Income before income taxes and equity income$7,421 $6,168 $6,386 
Years Ended December 31,
202020192018
Current income tax expense (benefit)
U.S. federal$84 $42 $(104)
U.S. state and local272 102 113 
Non-U.S.493 758 577 
Total current income tax expense849 902 586 
Deferred income tax expense (benefit)
U.S. federal632 (145)(578)
U.S. state and local(15)3 250 
Non-U.S.308 9 216 
Total deferred income tax expense (benefit)925 (133)(112)
Total income tax expense$1,774 $769 $474 

Provisions are made for estimated U.S. and non-U.S. income taxes which may be incurred on the reversal of our basis differences in investments in foreign subsidiaries and corporate joint ventures not deemed to be indefinitely reinvested. Taxes have not been provided on basis differences in investments primarily as a result of earnings in foreign subsidiaries which are deemed indefinitely reinvested of $3.2 billion at December 31, 2020 and 2019. Additional basis differences related to investments in nonconsolidated China JVs exist of $4.1 billion at December 31, 2020 and 2019 as a result of fresh-start reporting. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested basis differences is not practicable.
Years Ended December 31,
202020192018
Income tax expense at U.S. federal statutory income tax rate$1,558 $1,295 $1,341 
State and local tax expense 219 117 282 
Non-U.S. income taxed at other than the U.S. federal statutory tax rate(1)166 90 
U.S. tax impact on Non-U.S. income and activities(160)(197)(822)
Change in valuation allowances370 (233)1,695 
Change in tax laws— (122)(134)
General business credits and manufacturing incentives(366)(420)(695)
Capital loss expiration— — 107 
Settlements of prior year tax matters(18)— (188)
Realization of basis differences in affiliates(12)— (59)
German statutory approval of net operating losses— — (990)
Foreign currency remeasurement(7)74 19 
Other adjustments191 89 (172)
Total income tax expense$1,774 $769 $474 

Deferred Income Tax Assets and Liabilities Deferred income tax assets and liabilities at December 31, 2020 and 2019 reflect the effect of temporary differences between amounts of assets, liabilities and equity for financial reporting purposes and the bases of such assets, liabilities and equity as measured based on tax laws, as well as tax loss and tax credit carryforwards. The following table summarizes the components of temporary differences and carryforwards that give rise to deferred tax assets and liabilities:
December 31, 2020December 31, 2019
Deferred tax assets
Postretirement benefits other than pensions$1,742 $1,695 
Pension and other employee benefit plans2,999 2,968 
Warranties, dealer and customer allowances, claims and discounts5,538 6,299 
U.S. capitalized research expenditures6,763 6,035 
U.S. operating loss and tax credit carryforwards(a)7,254 8,686 
Non-U.S. operating loss and tax credit carryforwards(b)7,216 6,731 
Miscellaneous3,479 1,965 
Total deferred tax assets before valuation allowances34,991 34,379 
Less: valuation allowances(9,095)(8,135)
Total deferred tax assets25,896 26,244 
Deferred tax liabilities
Property, plant and equipment1,670 1,565 
Intangible assets744 763 
Total deferred tax liabilities2,414 2,328 
Net deferred tax assets$23,482 $23,916 
_________
(a)    At December 31, 2020, U.S. operating loss and tax credit carryforwards of $7.1 billion expire by 2040 if not utilized and the remaining balance of $137 million may be carried forward indefinitely.
(b)    At December 31, 2020, Non-U.S. operating loss and tax credit carryforwards of $1.3 billion expire by 2040 if not utilized and the remaining balance of $5.9 billion may be carried forward indefinitely.
Valuation Allowances During the years ended December 31, 2020 and 2019, valuation allowances against deferred tax assets of $9.1 billion and $8.1 billion were comprised of cumulative losses, credits and other timing differences, primarily in Germany, Spain and South Korea.

Uncertain Tax Positions The following table summarizes activity of the total amounts of unrecognized tax benefits:
Years Ended December 31,
202020192018
Balance at beginning of period$775 $1,341 $1,557 
Additions to current year tax positions435 18 292 
Additions to prior years' tax positions26 13 264 
Reductions to prior years' tax positions(132)(501)(244)
Reductions in tax positions due to lapse of statutory limitations(3)(8)(38)
Settlements(10)(93)(450)
Other(5)5 (40)
Balance at end of period$1,086 $775 $1,341 

At December 31, 2020 and 2019 there were $851 million and $539 million of unrecognized tax benefits that if recognized would favorably affect our effective tax rate in the future. In the years ended December 31, 2020, 2019 and 2018 income tax related interest and penalties were insignificant. At December 31, 2020 and 2019 we had liabilities of $92 million and $117 million for income tax related interest and penalties.

At December 31, 2020 it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits in the next twelve months.
Other Matters Income tax returns are filed in multiple jurisdictions and are subject to examination by taxing authorities throughout the world. We have open tax years from 2011 to 2020 with various significant tax jurisdictions. Tax authorities may have the ability to review and adjust net operating loss or tax credit carryforwards that were generated prior to these periods if utilized in an open tax year. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle.