INCOME TAXES (Tables)
|
12 Months Ended |
Dec. 31, 2022 |
Income Tax Disclosure [Abstract] |
|
Schedule of components of income tax provision |
Details of the Company’s income tax provision are presented below:
| | | | | | | | | | | | In millions of dollars | 2022 | 2021 | 2020 | Current | | | | Federal | $ | 407 | | $ | 522 | | $ | 305 | | Non-U.S. | 4,106 | | 3,288 | | 4,113 | | State | 270 | | 228 | | 440 | | Total current income taxes | $ | 4,783 | | $ | 4,038 | | $ | 4,858 | | Deferred | | | | Federal | $ | (807) | | $ | 1,059 | | $ | (1,430) | | Non-U.S. | 353 | | 8 | | (690) | | State | (687) | | 346 | | (213) | | Total deferred income taxes | $ | (1,141) | | $ | 1,413 | | $ | (2,333) | | Provision for income tax on continuing operations before noncontrolling interests(1) | $ | 3,642 | | $ | 5,451 | | $ | 2,525 | | Provision (benefit) for income taxes on: | | | | Discontinued operations | $ | (41) | | $ | — | | $ | — | | | | | | Gains (losses) included in AOCI, but excluded from net income | (1,573) | | (1,684) | | 1,520 | | Employee stock plans | (8) | | (6) | | (4) | | Opening adjustment to Retained earnings(2) | — | | — | | (911) | |
(1)Includes the tax on realized investment gains and impairment losses resulting in a provision (benefit) of $14 million and $(137) million in 2022, $169 million and $(57) million in 2021 and $454 million and $(14) million in 2020, respectively. (2)2020 reflects the tax effect of ASU 2016-13 for current expected credit losses (CECL).
|
Schedule of effective income tax rate reconciliation |
The reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate applicable to income from continuing operations (before noncontrolling interests and the cumulative effect of accounting changes) for each of the periods indicated is as follows:
| | | | | | | | | | | | | 2022 | 2021 | 2020 | Federal statutory rate | 21.0 | % | 21.0 | % | 21.0 | % | State income taxes, net of federal benefit | 2.0 | | 2.1 | | 1.3 | | Non-U.S. income tax rate differential | 4.3 | | 1.6 | | 3.5 | | Tax audit resolutions | (3.2) | | (0.4) | | 0.3 | | Nondeductible FDIC premiums | 1.0 | | 0.6 | | 1.3 | | Tax advantaged investments | (3.0) | | (2.3) | | (4.4) | | Valuation allowance releases(1) | (2.3) | | (1.7) | | (4.4) | | Other, net | (0.4) | | (1.1) | | (0.1) | | Effective income tax rate | 19.4 | % | 19.8 | % | 18.5 | % |
(1)See “Deferred Tax Assets” below for a description of the components.
|
Schedule of deferred tax assets and liabilities |
Deferred income taxes at December 31 related to the following:
| | | | | | | | | In millions of dollars | 2022 | 2021 | Deferred tax assets | | | Credit loss deduction | $ | 5,162 | | $ | 5,330 | | Deferred compensation and employee benefits | 2,059 | | 2,335 | | U.S. tax on non-U.S. earnings | 1,191 | | 1,138 | | Investment and loan basis differences | 5,149 | | 2,970 | | Tax credit and net operating loss carry-forwards | 14,623 | | 15,620 | | Fixed assets and leases | 3,551 | | 3,064 | | Other deferred tax assets | 4,055 | | 3,549 | | Gross deferred tax assets | $ | 35,790 | | $ | 34,006 | | Valuation allowance | $ | 2,438 | | $ | 4,194 | | Deferred tax assets after valuation allowance | $ | 33,352 | | $ | 29,812 | | Deferred tax liabilities | | | | | | | | | Intangibles and leases | $ | (2,271) | | $ | (2,446) | | Non-U.S. withholding taxes | (1,142) | | (987) | | Debt issuances | (595) | | (126) | | Other deferred tax liabilities | (1,672) | | (1,464) | | Gross deferred tax liabilities | $ | (5,680) | | $ | (5,023) | | Net deferred tax assets | $ | 27,672 | | $ | 24,789 | |
|
Summary of unrecognized tax benefits |
The following is a rollforward of the Company’s unrecognized tax benefits:
| | | | | | | | | | | | In millions of dollars | 2022 | 2021 | 2020 | Total unrecognized tax benefits at January 1 | $ | 1,296 | | $ | 861 | | $ | 721 | | Increases for current year’s tax positions | 55 | | 97 | | 51 | | Increases for prior years’ tax positions | 168 | | 515 | | 217 | | Decreases for prior years’ tax positions | (119) | | (107) | | (74) | | Amounts of decreases relating to settlements | (50) | | (64) | | (40) | | Reductions due to lapse of statutes of limitation | (26) | | (2) | | (13) | | Foreign exchange, acquisitions and dispositions | (13) | | (4) | | (1) | | Total unrecognized tax benefits at December 31 | $ | 1,311 | | $ | 1,296 | | $ | 861 | |
|
Schedule of income tax penalties and interest accrued |
Interest and penalties (not included in unrecognized tax benefits above) are a component of Provision for income taxes. | | | | | | | | | | | | | | | | | | | | | | 2022 | 2021 | 2020 | In millions of dollars | Pretax | Net of tax | Pretax | Net of tax | Pretax | Net of tax | Total interest and penalties on the Consolidated Balance Sheet at January 1 | $ | 214 | | $ | 164 | | $ | 118 | | $ | 96 | | $ | 100 | | $ | 82 | | Total interest and penalties in the Consolidated Statement of Income | 27 | | 16 | | 32 | | 24 | | 14 | | 10 | | Total interest and penalties on the Consolidated Balance Sheet at December 31(1) | 234 | | 176 | | 214 | | 164 | | 118 | | 96 | |
(1)Includes $3 million, $3 million and $4 million for non-U.S. penalties in 2022, 2021 and 2020, respectively. Also includes $0 million, $0 million and $1 million for state penalties in 2022, 2021 and 2020, respectively.
|
Schedule of major jurisdictions and earliest tax year subject to examination |
The following are the major tax jurisdictions in which the Company and its affiliates operate and the earliest tax year subject to examination:
| | | | | | Jurisdiction | Tax year | United States | 2016 | Mexico | 2017 | New York State and City | 2009 | United Kingdom | 2016 | India | 2021 | | | Singapore | 2021 | Hong Kong | 2016 | Ireland | 2018 |
|
Schedule of deferred tax assets and liabilities by jurisdiction |
The following table summarizes Citi’s DTAs:
| | | | | | | | | In billions of dollars | | | Jurisdiction/component(1) | DTAs balance December 31, 2022 | DTAs balance December 31, 2021 | U.S. federal(2) | | | Net operating losses (NOLs)(3) | $ | 3.3 | | $ | 3.2 | | Foreign tax credits (FTCs) | 1.9 | | 2.8 | | General business credits (GBCs) | 5.2 | | 4.5 | | Future tax deductions and credits | 10.1 | | 8.4 | | | | | Total U.S. federal | $ | 20.5 | | $ | 18.9 | | State and local | | | New York NOLs | $ | 1.9 | | $ | 1.2 | | Other state NOLs | 0.2 | | 0.2 | | Future tax deductions | 2.2 | | 1.8 | | Total state and local | $ | 4.3 | | $ | 3.2 | | Non-U.S. | | | NOLs | $ | 0.7 | | $ | 0.5 | | | | | Future tax deductions | 2.2 | | 2.2 | | Total non-U.S. | $ | 2.9 | | $ | 2.7 | | Total | $ | 27.7 | | $ | 24.8 | |
(1)All amounts are net of valuation allowances. (2)Included in the net U.S. federal DTAs of $20.5 billion as of December 31, 2022 were deferred tax liabilities of $3.3 billion that will reverse in the relevant carry-forward period and may be used to support the DTAs. (3)Consists of non-consolidated tax return NOL carry-forwards that are eventually expected to be utilized in Citigroup’s consolidated tax return.
|
Summary of tax carryforwards |
The following table summarizes the amounts of tax carry-forwards and their expiration dates:
| | | | | | | | | In billions of dollars | | Year of expiration | December 31, 2022 | December 31, 2021 | U.S. tax return general basket foreign tax credit carry-forwards(1) | | | | | | | | | | | | 2022 | $ | — | | $ | 0.5 | | 2023 | — | | 0.4 | | 2025 | 0.8 | | 1.5 | | 2027 | 1.1 | | 1.1 | | | | | | | | Total U.S. tax return general basket foreign tax credit carry-forwards | $ | 1.9 | | $ | 3.5 | | U.S. tax return branch basket foreign tax credit carry-forwards(1) | | | 2022 | $ | — | | $ | 1.0 | | 2028 | 0.7 | | 0.6 | | 2029 | 0.2 | | 0.2 | | Total U.S. tax return branch basket foreign tax credit carry-forwards | $ | 0.9 | | $ | 1.8 | | U.S. tax return general business credit carry-forwards | | | 2032 | $ | 0.4 | | $ | 0.4 | | 2033 | 0.3 | | 0.3 | | 2034 | 0.2 | | 0.2 | | 2035 | 0.2 | | 0.2 | | 2036 | 0.2 | | 0.2 | | 2037 | 0.5 | | 0.5 | | 2038 | 0.5 | | 0.5 | | 2039 | 0.7 | | 0.7 | | 2040 | 0.7 | | 0.7 | | 2041 | 0.8 | | 0.8 | | 2042 | 0.7 | | — | | Total U.S. tax return general business credit carry-forwards | $ | 5.2 | | $ | 4.5 | | U.S. subsidiary separate federal NOL carry-forwards | | | 2027 | $ | 0.1 | | $ | 0.1 | | 2028 | 0.1 | | 0.1 | | 2030 | 0.3 | | 0.3 | | | | | 2033 | 1.6 | | 1.6 | | 2034 | 2.0 | | 2.0 | | 2035 | 3.3 | | 3.3 | | 2036 | 2.1 | | 2.1 | | 2037 | 1.0 | | 1.0 | | Unlimited carry-forward period | 5.3 | | 4.6 | | Total U.S. subsidiary separate federal NOL carry-forwards(2) | $ | 15.8 | | $ | 15.1 | | New York State NOL carry-forwards(2) | | | 2034 | $ | 11.5 | | $ | 6.6 | | | | | | | | | | | | | | | | | | | | | | | New York City NOL carry-forwards(2) | | | | | | | | | | | | | | | | | | 2034 | $ | 10.3 | | $ | 7.2 | | | | | | | | Non-U.S. NOL carry-forwards(1) | | | Various | $ | 1.1 | | $ | 1.1 | | | | |
(1)Before valuation allowance. (2)Pretax.
|