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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes
Note 16Income Taxes
The Company and its domestic subsidiaries file a consolidated federal income tax return. Tax liabilities and benefits realized by the consolidated group are allocated as generated by the respective entities.
Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted through income tax expense as changes in tax laws or rates are enacted.
The Company qualified and claimed certain employer payroll tax credits that are allowed under the Coronavirus Aid, Relief and Economic Security Act. For the year ended December 31, 2021, the Company recorded $21 million of refundable employee retention tax credit reported in property and casualty claims and claims expense in the Consolidated Statements of Operations.
Regulatory tax examinations On January 4, 2021 and October 1, 2021, the Company acquired National General and SafeAuto, respectively. For tax years prior to the acquisition, National General and SafeAuto are subject to separate Internal Revenue Service (“IRS”) audits. The IRS has completed its exam of Allstate’s tax years prior to 2017, National General tax years prior to 2016, and SafeAuto’s tax years prior to 2018. Currently, the Company is under exam for the 2017 and 2018 tax years and National General is under exam for the 2016, 2017, and 2018 tax years. Any adjustments that may result from IRS examinations of the Company’s tax returns are not expected to have a material effect on the consolidated financial statements.
Unrecognized tax benefits The Company recognizes tax positions in the consolidated financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the consolidated financial statements.
Reconciliation of the change in the amount of unrecognized tax benefits
 For the years ended December 31,
($ in millions)202120202019
Balance – beginning of year$12 $70 $70 
Acquisitions5 — — 
Decrease for settlements— (58)— 
Balance – end of year$17 $12 $70 
    The Company believes that the unrecognized tax benefits balance will not materially change within the next twelve months.
Components of the deferred income tax assets and liabilities
As of December 31,
($ in millions)20212020
Deferred tax assets
Unearned premium reserves$742 $659 
Discount on loss reserves169 79 
Accrued compensation151 146 
Net operating loss carryover88 23 
Other postretirement benefits31 34 
Pension— 187 
Other assets90 91 
Total deferred tax assets before valuation allowance1,271 1,219 
Valuation allowance(24)— 
Total deferred tax assets after valuation allowance1,247 1,219 
Deferred tax liabilities
DAC(924)(683)
Investments(666)(216)
Intangible assets(219)(86)
Unrealized net capital gains(163)(539)
Pension(9)— 
Other liabilities(99)(77)
Total deferred tax liabilities(2,080)(1,601)
Net deferred tax liabilities$(833)$(382)
As of December 31, 2021, the Company has U.S. federal and foreign net operating loss (“NOL”) carryforwards, some of which will expire on various dates from 2024 through 2037 as indicated in the table below. In assessing the realizability of gross deferred tax assets, management considers whether it is more likely than not that some portion or all of the gross deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment, as well as limitations on use in future periods. Accordingly, management believes that it is more likely than not that the benefit from certain NOL carryforwards from recent acquisitions will not be realized. The Company had a valuation allowance of $24 million on the deferred tax assets related to these NOL carryforwards.
The provisions of the Tax Cuts and Jobs Act of 2017 eliminated the 20-year carryforward period and made it indefinite for federal net operating losses generated in tax years after December 31, 2017. For such amounts generated prior to 2018, the 20-year carryforward period continues to apply.
Components of the net operating loss carryforwards as of December 31, 2021
($ in millions)20-Year Carryforward
Expires in 2024-2037		Indefinite Carryforward PeriodTotal
US Federal$195 $9 $204 
Foreign— 218 218 
Total$195 $227 $422 
Components of income tax expense
 For the years ended December 31,
($ in millions)202120202019
Current$841 $1,480 $919 
Deferred448 (107)197 
Total income tax expense$1,289 $1,373 $1,116 
The Company paid income taxes of $1.05 billion, $1.48 billion and $648 million in 2021, 2020 and 2019, respectively.
The Company had current income tax receivable of $370 million and payable of $55 million as of December 31, 2021 and 2020, respectively.
Reconciliation of the statutory federal income tax rate to the effective income tax rate
For the years ended December 31,
($ in millions)202120202019
Income before income taxes$6,448 $6,802 $5,443 
Statutory federal income tax rate on income from operations1,354 21.0 %1,428 21.0 %1,141 21.0 %
State income taxes13 0.2 31 0.4 39 0.7 
Tax credits(42)(0.6)(24)(0.4)(19)(0.3)
Tax-exempt income(18)(0.3)(23)(0.3)(27)(0.5)
Share-based payments (18)(0.3)(30)(0.4)(24)(0.4)
Other— — (9)(0.1)6 — 
Effective income tax rate on income from operations$1,289 20.0 %$1,373 20.2 %$1,116 20.5 %