Income Taxes

3 Months Ended

Mar. 31, 2016

Note 13 Income Taxes

Table 92: Net Operating Loss Carryforwards and Tax Credit Carryforwards
		March 31			December 31
In millions		2016			2015
Net Operating Loss Carryforwards:
	Federal		$	858	$	878
	State		$	2,249	$	2,272
Tax Credit Carryforwards:
	Federal		$	59	$	64
	State		$	3	$	3

The federal net operating loss carryforwards expire in 2032. The state net operating loss carryforwards will expire from 2016 to 2036. 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, but a valuation allowance of $61 million has been recorded against certain state tax carryforwards as of March 31, 2016. If select uncertain tax positions were successfully challenged by a state, the state net operating losses listed above could be reduced by $60 million.

PNC is subject to U.S. federal income tax as well as income tax in most states and some foreign jurisdictions. Examinations were completed for PNC’s consolidated federal income tax returns for 2007 through 2010 and National City’s consolidated federal income tax returns through 2008 and were settled with the Internal Revenue Service (IRS). The IRS is currently examining PNC's consolidated federal income tax returns for 2011 through 2013. In addition, we are under continuous examinations by various state taxing authorities. With few exceptions, we are no longer subject to state and local and foreign income tax examinations by taxing authorities for periods before 2010. For all open audits, any potential adjustments have been considered in establishing our unrecognized tax benefits as of March 31, 2016.

PNC had unrecognized tax benefits of $20 million at March 31, 2016 and $26 million at December 31, 2015. At March 31, 2016, these unrecognized tax benefits, if recognized, would favorably impact the effective income tax rate.

While it is reasonably possible that the balance of 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 believes it is unlikely that its unrecognized tax benefits will change by a significant amount during the next twelve months.

During the three months ended March 31, 2016, we recognized $52 million of amortization, $56 million of tax credits, and $19 million of other tax benefits associated with qualified investments in low income housing tax credits within Income taxes.