
Note 11		Income Taxes

The components of income tax expense were:


	Three Months Ended September 30					Nine Months Ended September 30
(Dollars in Millions)	2018			2017		2018			2017
Federal
Current	$	385		$	455	$	931		$	1,479
Deferred		(53	)		54		(17	)		(103	)
Federal income tax		332			509		914			1,376
State
Current		141			53		295			199
Deferred		(13	)		27		54			64
State income tax		128			80		349			263
Total income tax provision	$	460		$	589	$	1,263		$	1,639

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent for 2018 and 35 percent for 2017 to the Company’s applicable income tax expense follows:


	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2018			2017			2018			2017
Tax at statutory rate	$	479		$	755		$	1,370		$	2,172
State income tax, at statutory rates, net of federal tax benefit		102			71			287			201
Tax effect of
Tax credits and benefits, net of related expenses		(122	)		(187	)		(369	)		(577	)
Exam resolutions		–			–			(49	)		–
Tax-exempt income		(33	)		(50	)		(98	)		(150	)
Noncontrolling interests		(2	)		(2	)		(5	)		(9	)
Other items		36			2			127			2
Applicable income taxes	$	460		$	589		$	1,263		$	1,639

The Company’s income tax returns are subject to review and examination by federal, state, local and foreign government authorities. On an ongoing basis, numerous federal, state, local and foreign examinations are in progress and cover multiple tax years. As of September 30, 2018, the federal taxing authority has completed its examination of the Company through the fiscal year ended December 31, 2010. The years open to examination by foreign, state and local government authorities vary by jurisdiction.

The Company’s net deferred tax asset was $915 million at September 30, 2018 and $473 million at December 31, 2017.