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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of the income tax expense are as follows:

 Years Ended December 31,
 202320222021
 (Dollars in millions)
Income tax expense:   
Federal   
Current$7 838 5 
Deferred(2)(332)514 
State   
Current(6)283 42 
Deferred55 (191)72 
Foreign   
Current— 32 23 
Deferred7 (73)12 
Total income tax expense$61 557 668 

 Years Ended December 31,
 202320222021
 (Dollars in millions)
Income tax expense was allocated as follows:   
Income tax expense in the consolidated statements of operations:   
Attributable to income$61 557 668 
Stockholders' equity:   
Tax effect of the change in accumulated other comprehensive loss$(21)297 222 

The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate:
 Years Ended December 31,
 202320222021
 (Percentage of pre-tax (loss) income)
Statutory federal income tax rate21.0 %21.0 %21.0 %
State income taxes, net of federal income tax benefit(0.2)%(8.8)%3.3 %
Goodwill impairment(21.9)%(68.9)%— %
Change in liability for unrecognized tax position(0.1)%(0.2)%0.1 %
Nondeductible executive stock compensation— %(0.1)%0.2 %
Change in valuation allowance1.3 %0.9 %— %
Net foreign income taxes— %3.0 %0.6 %
Research and development credits0.1 %1.1 %(0.5)%
Divestitures of businesses(1)
(0.4)%(4.0)%— %
Other, net(0.4)%(0.2)%— %
Effective income tax rate(0.6)%(56.2)%24.7 %
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(1)Includes GILTI (as defined below) incurred as a result of the sale of our Latin American business.
The effective tax rate for the year ended December 31, 2023 includes a $2.2 billion unfavorable impact of a non-deductible goodwill impairment and a $137 million favorable impact as a result of utilizing available capital losses generated by the sale of our Latin American business in 2022. The effective tax rate for the year ended December 31, 2022 includes a $682 million unfavorable impact of non-deductible goodwill impairments and $128 million unfavorable impact related to incurring tax on Global Intangible Low-Tax Income ("GILTI") as a result of the sale of our Latin American business.

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:
 As of December 31,
 2023
2022(1)
 (Dollars in millions)
Deferred tax assets  
Post-retirement and pension benefit costs$659 725 
Net operating loss carryforwards794 871 
Other employee benefits23 85 
Other511 519 
Gross deferred tax assets1,987 2,200 
Less valuation allowance(399)(550)
Net deferred tax assets1,588 1,650 
Deferred tax liabilities  
Property, plant and equipment, primarily due to depreciation differences(3,332)(3,046)
Goodwill and other intangible assets(1,271)(1,634)
Gross deferred tax liabilities(4,603)(4,680)
Net deferred tax liability$(3,015)(3,030)
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(1)Excludes $138 million of deferred tax assets and $38 million of deferred tax liabilities related to the EMEA business sold November 1, 2023, that were classified as held for sale as of December 31, 2022.

Of the $3.0 billion net deferred tax liability at December 31, 2023 and 2022, respectively, $3.1 billion and $3.2 billion is reflected as a long-term liability and $112 million and $133 million is reflected as a net noncurrent deferred tax asset, in other, net on our consolidated balance sheets at December 31, 2023 and 2022, respectively.

Income taxes receivable as of December 31, 2023 was $273 million and income taxes payable as of December 31, 2022 was $943 million.

At December 31, 2023, we had federal NOLs of approximately $800 million, net of expirations from Section 382 limitations and uncertain tax positions, for U.S. federal income tax purposes. We expect to use substantially all of these tax attributes to reduce our future federal tax liabilities, although the timing of that use will depend upon our future earnings and future tax circumstances. Our ability to use these NOLs is subject to annual limits imposed by Section 382. As a result, we anticipate that our cash income tax liabilities will increase in future periods. If unused, the NOLs will expire between 2026 and 2029.

At December 31, 2023 we had state net operating loss carryforwards of $13 billion (net of uncertain tax positions). Our ability to use these NOLs is subject to annual limits imposed by Section 382.

We establish valuation allowances when necessary to reduce the deferred tax assets to amounts we expect to realize. As of December 31, 2023, we established a valuation allowance of $399 million as it is more likely than not that this amount of net operating loss will not be utilized prior to expiration. Our valuation allowance at December 31, 2023 and 2022 is primarily related to NOL carryforwards. This valuation allowance decreased by $151 million during 2023, primarily due to the impact of utilization of available capital losses.
A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2023 and 2022 is as follows:
20232022
 (Dollars in millions)
Unrecognized tax benefits at beginning of year$1,318 1,375 
Decrease in tax positions of prior periods netted against deferred tax assets(411)(661)
(Decrease) increase in tax positions taken in the current year(73)634 
Increase (decrease) in tax positions taken in the prior year752 (3)
Decrease due to payments/settlements(1)— 
Decrease from the lapse of statute of limitations(52)— 
Decrease related to divestitures of businesses$(109)(27)
Unrecognized tax benefits at end of year$1,424 1,318 

As of December 31, 2023 the total amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate was $280 million. The unrecognized tax benefits also includes tax positions that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes, that would not impact the effective tax rate but could impact cash tax amounts payable to taxing authorities.

Our policy is to reflect interest expense associated with unrecognized tax benefits in income tax expense. We had accrued interest (presented before related tax benefits) of approximately $100 million and $26 million at December 31, 2023 and 2022, respectively.

We, or at least one of our subsidiaries, file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2004. The Internal Revenue Service and state and local taxing authorities reserve the right to audit any period where net operating loss carryforwards are available.

Based on our current assessment of various factors, including (i) the potential outcomes of these ongoing examinations, (ii) the expiration of statute of limitations for specific jurisdictions, (iii) the negotiated settlement of certain disputed issues, and (iv) the administrative practices of applicable taxing jurisdictions, it is reasonably possible that the related unrecognized tax benefits for uncertain tax positions previously taken may decrease by up to $676 million within the next 12 months. The actual amount of such decrease, if any, will depend on several future developments and events, many of which are outside our control.

In August 2022, the Inflation Reduction Act was signed into law and which, among other things, implemented a corporate alternative minimum tax (“CAMT”) on adjusted financial statement income effective for tax periods occurring after December 31, 2022. The CAMT had no material impact on our financial results as of December 31, 2023. In addition, the Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective on January 1, 2024. While the US has not yet adopted the Pillar Two rules, various other governments around the world are enacting legislation, some of which are effective for tax periods after December 31, 2023. While the global minimum tax will increase our administrative and compliance burdens, it is expected to have an immaterial impact to our financial statements.