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Federal Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020



	For the Years Ended December 31,
	2020			2019			2018
Current	$	(61	)	$	181		$	91
Deferred		(15	)		(148	)		153
Federal income tax expense (benefit)	$	(76	)	$	33		$	244

Reconciliation of effective tax rate differences



	For the Years Ended December 31,
	2020			2019			2018
Income (loss) before taxes	$	423		$	919		$	1,885
Federal statutory rate		21%			21%			21%
Federal income tax expense (benefit) at federal statutory rate		89			193			396
Effect of:
Tax-preferred investment income⁽¹⁾		(98	)		(99	)		(87	)
Tax credits		(39	)		(40	)		(39	)
Excess tax benefits from stock-based compensation		3			(9	)		(5	)
Tax impact associated with the Tax Cuts and Jobs Act⁽²⁾		(37	)		(17	)		(19	)
Other items		6			5			(2	)
Federal income tax expense (benefit)	$	(76	)	$	33		$	244
Effective tax rate		-18%			4%			13%

⁽¹⁾Relates primarily to separate account dividends eligible for the dividends-received deduction.

⁽²⁾In 2018, we recognized a $27 million tax benefit from the impact of the reduced federal statutory rate under the Tax Cuts and Jobs Act (the “Tax Act”) on our adoption of an Internal Revenue Service pronouncement related to variable annuity contracts. In 2019, we recognized a $17 million tax benefit from the impact of the reduced corporate tax rate under the Tax Act on our election to revalue policyholder tax reserves. In 2020, we recognized a $37 million tax benefit attributable to the carry back of a 2020 net operating loss under the provisions of the Coronavirus Aid, Relief, and Economic Security Act, which provides for a five-year carryback period.

Federal Income Tax Asset Liability



	As of December 31,
	2020			2019
Current	$	147		$	60
Deferred		(3,256	)		(2,443	)
Total federal income tax asset (liability)	$	(3,109	)	$	(2,383	)

Significant components of deferred tax assets and liabilities



	As of December 31,
	2020			2019
Deferred Tax Assets
Future contract benefits and other contract holder funds	$	2,377		$	643
Reinsurance related embedded derivative asset		82			69
Compensation and benefit plans		212			190
Intangibles		27			26
Tax credits		19			-
Net operating losses		218			216
Other		36			14
Total deferred tax assets	$	2,971		$	1,158
Deferred Tax Liabilities
DAC	$	382		$	813
VOBA		167			194
Net unrealized gain on fixed maturity AFS securities		4,001			2,308
Net unrealized gain on trading securities		90			72
Investment activity		1,249			109
Other		338			105
Total deferred tax liabilities	$	6,227		$	3,601
Net deferred tax asset (liability)	$	(3,256	)	$	(2,443	)

Reconciliation Of Unrecognized Tax Benefits



	For the Years Ended
	December 31,
	2020		2019
Balance as of beginning-of-year	$	48	$	16
Increases for prior year tax positions		-		32
Increases for current year tax positions		3		-
Balance as of end-of-year	$	51	$	48