Income Taxes

9 Months Ended

Sep. 30, 2022

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)	2022			2021		2022			2021
Federal
Current	$	427		$	354	$	1,052		$	1,057
Deferred		(51	)		99		(46	)		305
Federal income tax		376			453		1,006			1,362
State
Current		150			94		328			297
Deferred		(45	)		17		(42	)		63
State income tax		105			111		286			360
Total income tax provision	$	481		$	564	$	1,292		$	1,722

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)	2022			2021			2022			2021
Tax at statutory rate	$	482		$	546		$	1,302		$	1,686
State income tax, at statutory rates, net of federal tax benefit		91			108			259			327
Tax effect of
Tax credits and benefits, net of related expenses		(79	)		(91	)		(231	)		(267	)
Tax-exempt income		(30	)		(28	)		(87	)		(85	)
Other items		17			29			49			61
Applicable income taxes	$	481		$	564		$	1,292		$	1,722

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, 2022, 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 through December 31, 2020 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 $4.4 billion at September 30, 2022 and $785 million at December 31, 2021.