The Company’s tax rate is based on income and statutory tax rates in the various jurisdictions in which the Company operates. Tax law requires certain items to be included in the Company’s tax returns at different times than the items reflected in the Company’s financial statements. As a result, the Company’s annual tax rate reflected in its financial statements is different than that reported in its tax returns. Some of these differences are permanent, such as expenses that are not deductible in the Company’s tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. The Company establishes valuation allowances for its deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The components of the Company’s income before income taxes include the following:

Year Ended December 31,	2020		2019		2018
Domestic	$	1,122.9	$	2,201.1	$	1,775.2
Foreign		535.0		898.1		1,035.0
	$	1,657.9	$	3,099.2	$	2,810.2

The components of the Company’s provision for income taxes include the following:

Year Ended December 31,	2020			2019			2018
Current provision:
Federal	$	182.5		$	352.3		$	267.1
State		44.9			96.8			67.5
Foreign		132.6			191.4			263.0
		360.0			640.5			597.6
Deferred (benefit) provision:
Federal		(11.2	)		40.7			22.6
State		1.7			(4.3	)		1.3
Foreign		9.0			34.4			(6.4	)
		(.5	)		70.8			17.5
	$	359.5		$	711.3		$	615.1

Tax benefits recognized for net operating loss carryforwards were $17.8, $12.4 and $5.0 for the years ended 2020, 2019 and 2018, respectively.

A reconciliation of the statutory U.S. federal tax rate to the effective income tax rate is as follows:

	2020			2019			2018
Statutory rate		21.0	%		21.0	%		21.0	%
Effect of:
Transition tax								(.2	)
State		2.3			2.3			2.2
Research and development tax credit		(1.4	)		(.9	)		(.8	)
Tax on foreign earnings		.8			.9			1.0
Other, net		(1.0	)		(.3	)		(1.3	)
		21.7	%		23.0	%		21.9	%

Based on the Company’s current operations, the Company does not expect that the repatriation of future foreign earnings will be subject to significant income tax as a result of the U.S. modified territorial system.

At December 31, 2020, the Company had net operating loss carryforwards of $492.2, of which $416.2 related to foreign subsidiaries and $76.0 related to states in the U.S. The related deferred tax asset was $129.2, for which a $95.6 valuation allowance has been provided. The carryforward periods range from four years to indefinite, subject to certain limitations under applicable laws. The future tax benefits of net operating loss carryforwards are evaluated on a regular basis, including a review of historical and projected operating results.

The tax effects of temporary differences representing deferred tax assets and liabilities are as follows:

At December 31,	2020			2019
Assets:
Accrued expenses	$	205.3		$	203.5
Net operating loss and tax credit carryforwards		140.1			132.0
Postretirement benefit plans					4.9
Allowance for losses on receivables		36.0			31.4
Goodwill and intangibles		10.0			18.7
Other		122.9			103.3
		514.3			493.8
Valuation allowance		(102.1	)		(118.5	)
		412.2			375.3
Liabilities:
Financial Services leasing depreciation		(765.1	)		(777.5	)
Depreciation and amortization		(168.0	)		(159.4	)
Postretirement benefit plans		(3.0	)
Other		(46.1	)		(28.9	)
		(982.2	)		(965.8	)
Net deferred tax liability	$	(570.0	)	$	(590.5	)

The balance sheet classifications of the Company’s deferred tax assets and liabilities are as follows:

At December 31,	2020			2019
Truck, Parts and Other:
Other noncurrent assets, net	$	90.4		$	115.4
Other liabilities		(3.5	)		(5.3	)
Financial Services:
Other assets		46.8			36.8
Deferred taxes and other liabilities		(703.7	)		(737.4	)
Net deferred tax liability	$	(570.0	)	$	(590.5	)

Cash paid for income taxes was $374.0, $586.0 and $607.6 in 2020, 2019 and 2018, respectively.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

	2020			2019		2018
Balance at January 1	$	30.7		$	21.2	$	22.9
Additions for tax positions related to the current year		5.5			6.5		11.2
Additions for tax positions related to prior years		.3			3.0
Reductions for tax positions related to prior years		(4.2	)
Reductions related to settlements							(5.7	)
Lapse of statute of limitations		(7.8	)				(7.2	)
Balance at December 31	$	24.5		$	30.7	$	21.2

The Company had $24.5, $30.7 and $21.2 of unrecognized tax benefits, of which $23.2, $28.4 and $18.9 would impact the effective tax rate, if recognized, as of December 31, 2020, 2019 and 2018, respectively.

The Company recognized $(.7), $.8 and $(.1) of (income) expense related to interest in 2020, 2019 and 2018, respectively. Accrued interest expense and penalties were $1.2, $1.9 and $1.1 as of December 31, 2020, 2019 and 2018, respectively. Interest and penalties are classified as income taxes in the Consolidated Statements of Income.

The Company believes it is reasonably possible that approximately $5.5 of unrecognized tax benefits, resulting primarily from research and development tax credits, will be resolved within the next 12 months. As of December 31, 2020, the United States Internal Revenue Service has completed examinations of the Company’s tax returns for all years through 2014. The Company’s tax returns for other major jurisdictions remain subject to examination for the years ranging from 2012 through 2020.