Income Taxes

3 Months Ended

Mar. 31, 2023

Income Taxes

Income Taxes

12. Income Taxes

Effective Income Tax Rate

Our provision for income taxes may not have the customary relationship of taxes to income. A reconciliation between the U.S. corporate income tax rate and the effective income tax rate was as follows:

	For the three months ended
	March 31,
	2023		2022
U.S. corporate income tax rate	21	%		21	%
Dividends received deduction	9			(5)
Tax credits	6			(4)
Employee compensation	4			(2)
Interest exclusion from taxable income	3			(2)
Impact of equity method presentation	3			(2)
Local country permanent tax adjustments	2			—
Global Intangible Low-Taxed Income	(6)			1
Low income housing tax credit amortization	(5)			1
Foreign country statutory rate differential	(2)			1
State income taxes	—			(2)
Other	2			2
Effective income tax rate	37	%		9	%

Effects of Tax Legislation

The Inflation Reduction Act of 2022 (“The Act”) was enacted by the U.S. government on August 16, 2022. The Act implements a new corporate alternative minimum tax (“CAMT”) effective January 1, 2023. We are an “Applicable Corporation,” which requires computation of the U.S. federal income tax liability under two systems, the U.S. regular corporate tax (“RCT”) and the CAMT. Although the CAMT may apply in any given year when tentative minimum tax (“TMT”) then exceeds the RCT liability, as a “prepayment” the CAMT generates a corresponding alternative minimum tax credit (“AMTC”). We made an accounting policy election in 2022 to recognize the CAMT as a current period tax expense when incurred, along with recording an offsetting AMTC related deferred tax asset. No CAMT accrual was made for the first quarter of 2023, as TMT did not exceed the calculated RCT liability.