v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Years Ended December 31,
202520242023
U.S. income (loss)$(42)$9,715 $6,284 
Non-U.S. income (loss)3,159 (1,196)4,119 
Income (loss) before income taxes$3,117 $8,519 $10,403 
Years Ended December 31,
202520242023
Current income tax expense (benefit)
U.S. federal$133 $202 $240 
U.S. state and local211 309 490 
Non-U.S.1,243 676 874 
Total current income tax expense (benefit)1,587 1,188 1,605 
Deferred income tax expense (benefit)
U.S. federal(789)891 (120)
U.S. state and local(177)101 (43)
Non-U.S.(283)376 (878)
Total deferred income tax expense (benefit)(1,249)1,368 (1,041)
Total income tax expense (benefit)$338 $2,556 $563 

The Non-U.S. deferred income tax benefit in the year ended December 31, 2023 relates primarily to the release of a valuation allowance in Korea.

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 $7.6 billion and $6.1 billion at December 31, 2025 and 2024. We have indefinitely reinvested basis differences related to investments in non-consolidated China JVs of $1.4 billion at December 31, 2025 and December 31, 2024 as a result of fresh-start reporting. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested basis differences is not practicable. Refer to Note 8 for additional information regarding the decrease in our basis differences related to investments in nonconsolidated affiliates from fresh-start reporting.
Year Ended December 31, 2025
In USDPercent of Pre-tax Income
U.S. federal statutory tax rate$655 21.0 %
State and local tax expense(a)772.5 %
Foreign tax effects
China1264.0 %
Mexico
Statutory tax rate difference between Mexico and U.S.1203.8 %
Other(48)(1.5)%
Germany
Changes in valuation allowances(367)(11.8)%
Changes in tax laws or rates42113.5 %
Other90.3 %
Other foreign jurisdictions(21)(0.7)%
Effect of changes in tax laws or rates enacted in the current period— — 
Effect of cross-border tax laws331.1 %
Tax credits
Research and development tax credits(478)(15.3)%
Other(95)(3.1)%
Changes in valuation allowances(40)(1.3)%
Nontaxable or nondeductible items
IRA credits(181)(5.8)%
Other(18)(0.6)%
Changes in unrecognized tax benefits(91)(2.9)%
Equity income or loss1264.0 %
Other adjustments1073.4 %
Total income tax expense (benefit)$338 10.8 %
__________
(a)State taxes in California, Michigan, Illinois, Florida, New Jersey, Pennsylvania, Minnesota, and Wisconsin made up the majority of the tax effect in this category.
Years Ended December 31,
20242023
Income tax expense at U.S. federal statutory income tax rate$1,789 $2,185 
State and local tax expense (benefit)323 348 
Non-U.S. income taxed at other than the U.S. federal statutory tax rate130 203 
U.S. tax impact on Non-U.S. income and activities(49)(62)
Change in valuation allowances46 (1,061)
Change in tax laws9 25 
General business credits and manufacturing incentives(906)(966)
Settlements of prior year tax matters— 23 
Realization of basis differences in affiliates(45)— 
Foreign currency remeasurement73 (62)
Equity income or loss982 (101)
Other adjustments204 31 
Total income tax expense (benefit)$2,556 $563 
Deferred Income Tax Assets and Liabilities Deferred income tax assets and liabilities at December 31, 2025 and 2024 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, 2025December 31, 2024
Deferred tax assets
Postretirement benefits other than pensions$1,062 $1,024 
Pension and other employee benefit plans989 1,421 
Warranties, dealer and customer allowances, claims, and discounts4,803 4,215 
U.S. capitalized research expenditures9,704 10,111 
U.S. operating loss and tax credit carryforwards(a)7,237 6,582 
Non-U.S. operating loss and tax credit carryforwards(b)5,550 5,239 
Deferred revenue2,162 1,565 
Miscellaneous3,429 2,737 
Total deferred tax assets before valuation allowances34,936 32,894 
Less: valuation allowances(6,842)(6,529)
Total deferred tax assets28,094 26,365 
Deferred tax liabilities
Property, plant, and equipment5,087 5,111 
Intangible assets631 635 
Total deferred tax liabilities5,718 5,746 
Net deferred tax assets$22,376 $20,619 
__________
(a)At December 31, 2025, U.S. operating loss deferred tax assets were $385 million, where $129 million can be carried forward indefinitely and $256 million will expire by 2045, if not utilized. At December 31, 2025, U.S. tax credit carryforwards were $6.9 billion, where $484 million can be carried forward indefinitely and $6.4 billion will expire by 2045, if not utilized.
(b)At December 31, 2025, Non-U.S. operating loss deferred tax assets were $5.5 billion, where $5.1 billion can be carried forward indefinitely and $339 million will expire by 2045, if not utilized. At December 31, 2025, Non-U.S. tax credit carryforwards were $67 million, all of which will expire by 2045, if not utilized.
Valuation Allowances During the years ended December 31, 2025 and 2024, valuation allowances against deferred tax assets of $6.8 billion and $6.5 billion were comprised of cumulative losses, credits, and other timing differences, primarily in Germany, Spain, the U.S., and Brazil.

Uncertain Tax Positions The following table summarizes activity of the total amounts of unrecognized tax benefits:
Years Ended December 31,
202520242023
Balance at beginning of period$586 $585 $520 
Additions to current year tax positions89 108 45 
Additions to prior years' tax positions10 28 72 
Reductions to prior years' tax positions(94)(109)(15)
Reductions in tax positions due to lapse of statutory limitations(18)(7)(19)
Settlements(1)(8)(18)
Other4 (11)— 
Balance at end of period$576 $586 $585 

At December 31, 2025 and 2024, there were $417 million and $415 million of unrecognized tax benefits that if recognized would favorably affect our effective tax rate in the future. In the years ended December 31, 2025, 2024, and 2023, income tax-related interest and penalties were insignificant. At December 31, 2025 and 2024, liabilities for income tax-related interest and penalties were insignificant.

Income Taxes Paid
Year Ended December 31, 2025
U.S. federal$277 
U.S. state314 
Non-U.S.957 
Total income taxes paid, net$1,548 

Income taxes paid, net, for the periods ended December 31, 2024 and 2023 were $1.5 billion and $1.7 billion. Income taxes paid exceeds 5% of total income taxes paid, net of refunds, in the following jurisdictions. No individual state represents 5% of the total income taxes paid.
Year Ended December 31, 2025
Foreign
Canada$364 
Mexico$354 
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 2025 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.