Income Taxes

9 Months Ended

Sep. 30, 2023

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)	2023			2022			2023			2022
Federal
Current	$	416		$	427		$	1,076		$	1,052
Deferred		(51	)		(51	)		(50	)		(46	)
Federal income tax		365			376			1,026			1,006
State
Current		62			150			277			328
Deferred		4			(45	)		(35	)		(42	)
State income tax		66			105			242			286
Total income tax provision	$	431		$	481		$	1,268		$	1,292

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)	2023			2022			2023			2022
Tax at statutory rate	$	411		$	482		$	1,232		$	1,302
State income tax, at statutory rates, net of federal tax benefit		85			91			270			259
Tax effect of
Tax credits and benefits, net of related expenses		(96	)		(79	)		(236	)		(231	)
Tax-exempt income		(40	)		(30	)		(115	)		(87	)
Other items		71			17			117			49
Applicable income taxes	$	431		$	481		$	1,268		$	1,292

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, 2023, federal tax examinations for all years ending through December 31, 2016 are completed and resolved. The Company’s tax returns for the years ended December 31, 2017 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 $6.7 billion at September 30, 2023 and $6.3 billion at December 31, 2022.