Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate for the second quarter of 2022 was (38.3) percent, a decrease from 21.5 percent in the prior year. The effective tax rate for the first six months of 2022 was 16.8 percent, as compared to 18.9 percent in the prior year. The primary factor that decreased the Company's effective tax rate for both periods was the tax impact associated with the second quarter 2022 charge related to steps toward resolving Combat Arms Earplugs litigation (discussed in Note 14).

The total amounts of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of June 30, 2022 and December 31, 2021 are $1,149 million and $1,112 million, respectively. It is reasonably possible that the amount of unrecognized tax benefits could significantly change within the next 12 months. At this time, the Company is not able to estimate the range by which these potential events could impact 3M’s unrecognized tax benefits in the next 12 months.

As of June 30, 2022 and December 31, 2021, the Company had valuation allowances of $140 million and $142 million on its deferred tax assets, respectively.