Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

 Note 11    Income Taxes

The components of income tax expense were:

	Three Months Ended June 30						Six Months Ended June 30
(Dollars in Millions)	2020			2019			2020			2019
Federal
Current	$	704		$	368		$	1,019		$	588
Deferred		(659	)		(31	)		(765	)		85
Federal income tax		45			337			254			673
State
Current		136			110			206			140
Deferred		(117	)		2			(136	)		14
State income tax		19			112			70			154
Total income tax provision	$	64		$	449		$	324		$	827

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)	2020			2019			2020			2019
Tax at statutory rate	$	159		$	478		$	461		$	916
State income tax, at statutory rates, net of federal tax benefit		36			94			95			178
Tax effect of
Tax credits and benefits, net of related expenses		(96	)		(107	)		(198	)		(210	)
Exam resolutions		–			–			–			(49	)
Tax-exempt income		(29	)		(31	)		(58	)		(63	)
Other items		(6	)		15			24			55
Applicable income taxes	$	64		$	449		$	324		$	827

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, 2020, 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, 2016, 2017 and 2018 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 $900 million at June 30, 2020 and $382 million at December 31, 2019.