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Income Taxes
 6 Months Ended
Jun. 30, 2013
Income Taxes [Abstract]  
Income Taxes

Note 16 Income Taxes

 

The net operating loss carryforwards at June 30, 2013 and December 31, 2012 follow:

Table 126: Net Operating Loss Carryforwards and Tax Credit Carryforwards 
  June 30 December 31 
In millions2013 2012 
Net Operating Loss Carryforwards:       
 Federal $1,157 $1,698 
 State  2,371  2,468 
Tax Credit Carryforwards:       
 Federal $33 $29 
 State  4  4 
Valuation Allowance:       
 State $59 $54 

The federal net operating loss carryforwards expire from 2027 to 2032. The state net operating loss carryforwards will expire from 2013 to 2031. The majority of the tax credit carryforwards expire in 2032. All federal and most state net operating loss and credit carryforwards are from acquired entities and utilization is subject to various statutory limitations. It is anticipated that the company will be able to fully utilize its carryforwards for federal tax purposes. A valuation allowance has been recorded against certain state carryforwards as reflected above.

 

Examinations are substantially completed for PNC's consolidated federal income tax returns for 2007 and 2008 and there are no outstanding unresolved issues. The Internal Revenue Service (IRS) is currently examining PNC's 2009 and 2010 returns. National City's consolidated federal income tax returns through 2008 have been audited by the IRS. Certain adjustments remain under review by the IRS Appeals Division for years 2003 through 2008.

 

The Company had unrecognized tax benefits of $109 million at June 30, 2013 and $176 million at December 31, 2012. The decrease results from the company partially resolving certain adjustments relating to legacy National City federal examinations and from resolving various state examinations. At June 30, 2013, $86 million of unrecognized tax benefits, if recognized, would favorably impact the effective income tax rate.

 

It is reasonably possible that the liability for unrecognized tax benefits could increase or decrease in the next twelve months due to completion of tax authorities' exams or the expiration of statutes of limitations. Management estimates that the liability for unrecognized tax benefits could decrease by $68 million within the next twelve months.