Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 12    Income Taxes

The components of income tax expense were:

	Three Months Ended September 30					Nine Months Ended September 30
(Dollars in Millions)	2021		2020			2021		2020
Federal
Current	$	354	$	(53	)	$	1,057	$	966
Deferred		99		306			305		(459	)
Federal income tax		453		253			1,362		507
State
Current		94		92			297		298
Deferred		17		2			63		(134	)
State income tax		111		94			360		164
Total income tax provision	$	564	$	347		$	1,722	$	671

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 September 30						Nine Months Ended September 30
(Dollars in Millions)	2021			2020			2021			2020
Tax at statutory rate	$	546		$	406		$	1,686		$	867
State income tax, at statutory rates, net of federal tax benefit		108			75			327			170
Tax effect of
Tax credits and benefits, net of related expenses		(91	)		(82	)		(267	)		(280	)
Exam resolutions		—			(47	)		—			(47	)
Tax-exempt income		(28	)		(29	)		(85	)		(87	)
Other items		29			24			61			48
Applicable income taxes	$	564		$	347		$	1,722		$	671

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, 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 $946 million at September 30, 2021 and $597 million at December 31, 2020.