Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

 Note 12    Income Taxes

The components of income tax expense were:

	Three Months Ended June 30					Six Months Ended June 30
(Dollars in Millions)	2019			2018		2019		2018
Federal
Current	$	368		$	312	$	588	$	546
Deferred		(31	)		17		85		36
Federal income tax		337			329		673		582
State
Current		110			62		140		154
Deferred		2			50		14		67
State income tax		112			112		154		221
Total income tax provision	$	449		$	441	$	827	$	803

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

	Three Months Ended June 30						Six Months Ended June 30
(Dollars in Millions)	2019			2018			2019			2018
Tax at statutory rate	$	478		$	462		$	916		$	891
State income tax, at statutory rates, net of federal tax benefit		94			96			178			185
Tax effect of
Tax credits and benefits, net of related expenses		(107	)		(132	)		(210	)		(247	)
Exam resolutions		–			–			(49	)		(49	)
Tax-exempt income		(31	)		(33	)		(63	)		(65	)
Noncontrolling interests		(2	)		(2	)		(4	)		(3	)
Other items		17			50			59			91
Applicable income taxes	$	449		$	441		$	827		$	803

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 June 30, 2019, federal tax examinations for all years ending through December 31, 2010, and years ending December 31, 2013, and December 31, 2014 are completed and resolved. The Company’s tax returns for the years ended December 31, 2011, 2012, 2015, and 2016 are under examination by the Internal Revenue Service. The years open to examination by foreign, state and local government authorities vary by jurisdiction.

The Company’s net deferred tax asset was $379 million at June 30, 2019 and $809 million at December 31, 2018.