Income Taxes

6 Months Ended

Jun. 30, 2021

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)	2021		2020			2021		2020
Federal
Current	$	350	$	704		$	703	$	1,019
Deferred		76		(659	)		206		(765	)
Federal income tax		426		45			909		254
State
Current		109		136			203		206
Deferred		16		(117	)		46		(136	)
State income tax		125		19			249		70
Total income tax provision	$	551	$	64		$	1,158	$	324

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)	2021			2020			2021			2020
Tax at statutory rate	$	533		$	159		$	1,140		$	461
State income tax, at statutory rates, net of federal tax benefit		105			36			219			95
Tax effect of
Tax credits and benefits, net of related expenses		(83	)		(96	)		(176	)		(198	)
Tax-exempt income		(29	)		(29	)		(57	)		(58	)
Other items		25			(6	)		32			24
Applicable income taxes	$	551		$	64		$	1,158		$	324

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, 2021, federal tax examinations for all years ending through December 31, 2014 are completed and resolved. The Company’s tax returns for the years ended December 31, 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 $862 million at June 30, 2021 and $597 million at December 31, 2020.