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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of income tax expense (benefit) applicable to pretax earnings for the years ended December 31 were as follows:
(In millions)ForeignU.S.Total
2021:
Current$884 $211 $1,095 
Deferred251 (349)(98)
Total income tax expense$1,135 $(138)$997 
2020:
Current$822 $(28)$794 
Deferred(28)(1,385)(1,413)
Total income tax expense$794 $(1,413)$(619)
2019:
Current$737 $69 $806 
Deferred183 152 335 
Total income tax expense$920 $221 $1,141 

The Japan income tax rate for the fiscal years 2021, 2020 and 2019 was 28.0%.

In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law and includes certain income tax provisions relevant to businesses. The Company was required to recognize the effect on the consolidated financial statements in the period the law was enacted, which was the period ended March 31, 2020. For the year ended December 31, 2020, the CARES Act did not have a material impact on the Company’s consolidated financial statements.
In September 2020, the U.S. Treasury and Internal Revenue Service issued Final and Proposed Regulations which address, among other items, the allocation of insurance expenses in the calculation of the foreign tax credit limitation. These regulations clarify how insurance related expenses are allocated and apportioned for this purpose. The Company had previously established valuation allowances on deferred foreign tax credits due to the uncertainty that previously existed. Under the guidance of these regulations, the Company recognized a one-time income tax benefit of $1.4 billion due to the release of these valuation allowances which were predominantly established on the Company’s deferred foreign tax credit benefits. The Company has determined that this will also reduce its effective tax rate in future periods, subject to any future changes in U.S. tax policy.

Income tax expense in the accompanying statements of earnings varies from the amount computed by applying the expected U.S. tax rate of 21% in 2021, 2020 and 2019 to pretax earnings. The principal reasons for the differences and the related tax effects for the years ended December 31 were as follows:
(In millions)202120202019
Income taxes based on U.S. statutory rates$1,118 $873 $933 
Foreign rate differential0 0 229 
Valuation allowance release0 (1,411)0 
Other, net(121)(81)(21)
Income tax expense$997 $(619)$1,141 
Total income tax expense for the years ended December 31 was allocated as follows:
(In millions)202120202019
Statements of earnings$997 $(619)$1,141 
Other comprehensive income (loss):
Unrealized foreign currency translation gains (losses) during
  period		15 (3)27 
Unrealized gains (losses) on fixed maturity securities:
Unrealized holding gains (losses) on fixed maturity
  securities during period		(194)223 1,532 
Reclassification adjustment for (gains) losses
  on fixed maturity securities included in net earnings		(7)33 5 
Unrealized gains (losses) on derivatives during period1 0 (3)
Pension liability adjustment during period30 (2)(18)
Total income tax expense (benefit) related to items of
  other comprehensive income (loss)		(155)251 1,543 
Total income taxes$842 $(368)$2,684 

The income tax effects of the temporary differences that gave rise to deferred income tax assets and liabilities as of December 31 were as follows:
(In millions)20212020
Deferred income tax liabilities:
Deferred policy acquisition costs$3,262 $3,663 
Unrealized gains and other basis differences on investments5,313 5,227 
Foreign currency gain on Aflac Japan0 70 
Premiums receivable66 112 
Policy benefit reserves3,578 3,834 
Total deferred income tax liabilities12,219 12,906 
Deferred income tax assets:
Unfunded retirement benefits7 9 
Other accrued expenses38 37 
Policy and contract claims794 868 
Foreign currency loss on Aflac Japan91 0 
Deferred compensation104 137 
Capital loss carryforwards0 12 
Depreciation230 202 
Anticipatory foreign tax credit5,883 5,972 
Deferred foreign tax credit701 647 
Other163 326 
Total deferred income tax assets8,011 8,210 
Net deferred income tax liability4,208 4,696 
Current income tax (asset) liability131 (35)
Total income tax liability$4,339 $4,661 

The application of U.S. GAAP requires the Company to evaluate the recoverability of deferred tax assets and establish a valuation allowance if necessary to reduce the deferred tax asset to an amount that is more likely than not expected to be realized. The Company has determined no valuation allowance against its anticipatory foreign tax credits is necessary. The anticipatory foreign tax credit represents the foreign tax credit the Company will generate from the reversal of Japan deferred tax liabilities in the future. The release of the valuation allowance on the anticipatory foreign tax credit is due to the regulations addressing the allocation of insurance expenses in the calculation of the foreign tax credit released September 29, 2020. The Company has also determined no valuation allowance against its deferred foreign tax credits is necessary. Deferred foreign tax credits are foreign tax credits generated in the current tax year by the Japanese life company, but are unable to be utilized until 2022 due to Japan's current tax year not closing until March 31, 2022. The
release of the valuation allowance on the deferred foreign tax credit is also due to the foreign tax credit regulations released September 29, 2020. Based upon a review of the Company's anticipated future taxable income, and including all other available evidence, both positive and negative, the Company's management has concluded that, notwithstanding the items noted above, it is more likely than not that all other deferred tax assets will be realized.

Under U.S. income tax rules, only 35% of non-life operating losses can be offset against life insurance taxable income each year. For current U.S. income tax purposes, as of December 31, 2021, there were non-life operating loss carryforwards of $56 million available to offset against future taxable income, all of which do not expire. The Company has no capital loss carryforwards available to offset capital gains. The Company has foreign tax credit carryforwards of $31 million available to offset against future excess foreign taxes paid, $3 million of which expire in 2030 with the remaining $28 million expiring in 2031.

The Company files federal income tax returns in the U.S. and Japan as well as state or prefecture income tax returns in various jurisdictions in the two countries. There are currently no open Federal, State, or local U.S. income tax audits. U.S. federal income tax returns for years before 2016 are no longer subject to examination. Japan corporate income tax returns for years before 2016 are no longer subject to examination. Management believes it has established adequate tax liabilities and final resolution of all open audits is not expected to have a material impact on the Company's consolidated financial statements.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended December 31:
(In millions)2021 2020 
Balance, beginning of year$19 $17 
Additions for tax positions of prior years1   2   
Reductions for tax positions of prior years(15)  0 
Balance, end of year$5 $19 

Included in the balance of the liability for unrecognized tax benefits at December 31, 2021, are no tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility, compared with $15 million at December 31, 2020. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate, but would accelerate the payment of cash to the taxing authority to an earlier period. The Company has accrued approximately $5 million as of December 31, 2021, for permanent uncertainties, which if reversed would not have a material effect on the annual effective rate.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognized approximately $1 million in interest and penalties in 2021, 2020 and 2019, respectively. The Company accrued an immaterial amount for the payment of interest and penalties as of December 31, 2021, compared with $3 million at December 31, 2020.

As of December 31, 2021, there were no material uncertain tax positions for which the total amounts of unrecognized tax benefits will significantly increase or decrease within the next 12 months.