Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 4 — INCOME TAXES

The provision for income taxes consists of the following (dollars in millions):

	2021			2020			2019
Current:
Federal	$	1,769		$	1,021		$	670
State		311			126			134
Foreign		15			5			17
Deferred:
Federal		24			(73	)		254
State		(18	)		(39	)		29
Foreign		11			3			(5	)
	$	2,112		$	1,043		$	1,099

Our provision for income taxes for the years ended December 31, 2021, 2020 and 2019 included tax benefits of $119 million, $92 million and $65 million, respectively, related to the settlement of employee equity awards. Our foreign pretax income was $64 million, $9 million and $50 million for the years ended December 31, 2021, 2020 and 2019, respectively.

A reconciliation of the federal statutory rate to the effective income tax rate follows:

	2021			2020			2019
Federal statutory rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal tax benefit		2.0			1.9			2.7
Change in liability for uncertain tax positions		0.7			(0.2	)		0.4
Tax benefit from settlements of employee equity awards		(1.2	)		(1.8	)		(1.3	)
Other items, net		0.8			0.8			1.1
Effective income tax rate on income attributable to HCA Healthcare, Inc.		23.3			21.7			23.9
Income attributable to noncontrolling interests from consolidated partnerships		(1.8	)		(2.5	)		(2.9	)
Effective income tax rate on income before income taxes		21.5	%		19.2	%		21.0	%

A summary of the items comprising the deferred tax assets and liabilities at December 31 follows (dollars in millions):

	2021				2020
	Assets		Liabilities		Assets		Liabilities
Depreciation and fixed asset basis differences	$	—	$	737	$	—	$	678
Allowances for professional liability and other risks		426		—		407		—
Accounts receivable		348		—		283		—
Compensation		502		—		487		—
Right-of-use lease assets and obligations		428		419		416		409
Other		499		652		485		606
	$	2,203	$	1,808	$	2,078	$	1,693

At December 31, 2021, federal and state net operating loss carryforwards (expiring in years 2024 through 2040) available to offset future taxable income approximated $31 million and $99 million, respectively. Utilization of net operating loss carryforwards in any one year may be limited.

The following table summarizes the activity related to our unrecognized tax benefits (dollars in millions):

	2021			2020
Balance at January 1	$	469		$	522
Additions based on tax positions related to the current year		57			(3	)
Additions for tax positions of prior years		66			13
Reductions for tax positions of prior years		(6	)		(30	)
Settlements		(3	)		(22	)
Lapse of applicable statutes of limitations		(7	)		(11	)
Balance at December 31	$	576		$	469

Our liability for unrecognized tax benefits was $642 million, including accrued interest of $99 million and excluding $33 million that was recorded as reductions of the related deferred tax assets, as of December 31, 2021 ($508 million, $73 million and $34 million, respectively, as of December 31, 2020). Unrecognized tax benefits of $217 million as of December 31, 2021 ($157 million as of December 31, 2020) would affect the effective rate, if recognized.

The Internal Revenue Service (“IRS”) was conducting an examination of the Company’s 2016, 2017 and 2018 federal income tax returns and the 2019 return for one affiliated partnership at December 31, 2021. We are also subject to examination by state and foreign taxing authorities. Depending on the resolution of any federal, state and foreign tax disputes, the completion of examinations by federal, state or foreign taxing authorities, or the expiration of statutes of limitation for specific taxing jurisdictions, we believe it is reasonably possible that our liability for unrecognized tax benefits may significantly increase or decrease within the next 12 months. However, we are currently unable to estimate the range of any possible change.