Tax Cuts and Jobs Act, income tax expense

  
enactment of the Act, the Company recorded a one-time additional income tax expense of $676 million in the fourth quarter of 2017 related to a one-time repatriation tax on the deemed repatriation of post-1986 undistributed earnings of foreign subsidiaries. A portion of the resulting income taxes payable can be paid in installments over eight years. The noncurrent income taxes payable related to the one-time repatriation tax was $365 million and $413 million as of December 31, 2021 and 2020, respectively.  
Provision for income taxes— The components of the provision for income taxes for the twelve months ended December 31, 2021, 2020 and 2019 were as follows:  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| In millions | 2021 |  | 2020 |  | 2019 |
| U.S. federal income taxes: |  |  |  |  |  |
| Current | $ | 399  |  |  | $ | 301  |  |  | $ | 356  |  |
| Deferred | (95) |  |  | (54) |  |  | (26) |  |
|  |  |  |  |  |  |
| Total U.S. federal income taxes | 304  |  |  | 247  |  |  | 330  |  |
| Foreign income taxes: |  |  |  |  |  |
| Current | 302  |  |  | 276  |  |  | 302  |  |
| Deferred | (57) |  |  | 15  |  |  | 53  |  |
| Total foreign income taxes | 245  |  |  | 291  |  |  | 355  |  |
| State income taxes: |  |  |  |  |  |
| Current | 79  |  |  | 48  |  |  | 77  |  |
| Deferred | 4  |  |  | 9  |  |  | 5  |  |
|  |  |  |  |  |  |
| Total state income taxes | 83  |  |  | 57  |  |  | 82  |  |
| Total provision for income taxes | $ | 632  |  |  | $ | 595  |  |  | $ | 767  |  |

  
Income before taxes for domestic and foreign operations for the twelve months ended December 31, 2021, 2020 and 2019 was as follows:  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| In millions | 2021 |  | 2020 |  | 2019 |
| Domestic | $ | 1,667  |  |  | $ | 1,419  |  |  | $ | 1,774  |  |
| Foreign | 1,659  |  |  | 1,285  |  |  | 1,514  |  |
| Total income before taxes | $ | 3,326  |  |  | $ | 2,704  |  |  | $ | 3,288  |  |

  
The reconciliation between the U.S. federal statutory tax rate and the effective tax rate for the twelve months ended December 31, 2021, 2020 and 2019 was as follows:  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
| U.S. federal statutory tax rate | 21.0  | % |  | 21.0  | % |  | 21.0  | % |
| U.S. tax effect of foreign earnings | 1.2  |  |  | 1.0  |  |  | 1.1  |  |
| Changes in tax law | (3.4) |  |  | (1.5) |  |  | —  |  |
| State income taxes, net of U.S. federal tax benefit | 2.1  |  |  | 1.9  |  |  | 1.7  |  |
|  |  |  |  |  |  |
| Differences between U.S. federal statutory and foreign tax rates | 1.9  |  |  | 2.0  |  |  | 2.0  |  |
| Nontaxable foreign interest income | (1.6) |  |  | (2.0) |  |  | (1.4) |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
| Tax effect of foreign dividends | 0.6  |  |  | 1.6  |  |  | 0.2  |  |
| Foreign derived intangible income | (1.3) |  |  | (1.3) |  |  | (0.1) |  |
| Excess tax benefits from stock-based compensation  | (0.5) |  |  | (1.0) |  |  | (0.9) |  |
| Other, net | (1.0) |  |  | 0.3  |  |  | (0.3) |  |
| Effective tax rate | 19.0  | % |  | 22.0  | % |  | 23.3  | % |

  
The Company's effective tax rate for the twelve months ended December 31, 2021, 2020 and 2019 was 19.0%, 22.0% and 23.3%, respectively. The 2021 effective tax rate benefited from discrete income tax benefits of $21 million in the third quarter of 2021 related to the utilization of capital losses and $112 million in the second quarter of 2021 related to the 57
