Income Taxes

6 Months Ended

Jun. 30, 2023

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)	2023			2022			2023			2022
Federal
Current	$	263		$	221		$	660		$	625
Deferred		33			107			1			5
Federal income tax		296			328			661			630
State
Current		119			89			215			178
Deferred		(33	)		(3	)		(39	)		3
State income tax		86			86			176			181
Total income tax provision	$	382		$	414		$	837		$	811

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)	2023			2022			2023			2022
Tax at statutory rate	$	368		$	409		$	821		$	820
State income tax, at statutory rates, net of federal tax benefit		83			84			185			168
Tax effect of
Tax credits and benefits, net of related expenses		(63	)		(46	)		(140	)		(152	)
Tax-exempt income		(41	)		(29	)		(75	)		(57	)
Other items		35			(4	)		46			32
Applicable income taxes	$	382		$	414		$	837		$	811

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, 2023, 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 $6.1 billion at June 30, 2023 and $6.3 billion at December 31, 2022.