XML 99 R25.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 14. Income Taxes Income taxes included in the income statement are summarized below. We file a consolidated federal income tax return.
Year ended December 31, Dollars in millions | 2023 | 2022 | 2021
Currently payable: |  |  |
Federal | $ | 257 |  | $ | 368 |  | $ | 423 |
State | 48 |  | 80 |  | 73 |
Total currently payable | $ | 305 |  | $ | 448 |  | $ | 496 |
Deferred: |  |  |
Federal | $ | (84) |  | $ | (14) |  | $ | 119 |
State | (25) |  | (12) |  | 27 |
Total deferred | (109) |  | (26) |  | 146 |
Total income tax (benefit) expense (a) | $ | 196 |  | $ | 422 |  | $ | 642 |
(a)There was income tax (benefit) expense on securities transactions of $(3) million in 2023, $2 million in 2022, and $(2) million in 2021. Income tax expense excludes equity- and gross receipts-based taxes, which are assessed in lieu of an income tax in certain states in which we operate. These non-income taxes, which are recorded in “noninterest expense” on the income statement, totaled $34 million in 2023, $33 million in 2022, and $33 million in 2021. Significant components of our deferred tax assets and liabilities included in “accrued income and other assets” on our Consolidated Balance Sheets, are as follows:
December 31, Dollars in millions | 2023 | 2022
Allowance for loan and lease losses | $ | 422 |  | $ | 380 |
Employee benefits | 166 |  | 187 |
Net unrealized securities losses | 1,612 |  | 1,959 |
Federal net operating losses and credits | 3 |  | 4 |
Non-tax accruals | 142 |  | 61 |
Operating lease liabilities(a) | 136 |  | 149 |
State net operating losses and credits | 1 |  | 1 |
Partnership investments | 78 |  | 90 |
Other | 148 |  | 164 |
Gross deferred tax assets | 2,708 |  | 2,995 |
Less: Valuation Allowance | 12 |  | 11 |
Total deferred tax assets | $ | 2,696 |  | $ | 2,984 |
Leasing transactions | $ | 446 |  | $ | 521 |
State taxes | 77 |  | 86 |
Operating lease right-of-use assets (a) | 119 |  | 130 |
Goodwill | 157 |  | 139 |
Other | 82 |  | 86 |
Total deferred tax liabilities | 881 |  | 962 |
Net deferred tax assets (liabilities) (b) | $ | 1,815 |  | $ | 2,022 |
(a)A separate deferred tax asset and liability is recognized for each operating lease item resulting from the adoption of ASC 842 in 2019. (b)From continuing operations. We conduct quarterly assessments of all available evidence to determine the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded. The available evidence used in connection with these assessments includes taxable income in prior periods, projected future taxable income, potential tax-planning strategies, and projected future reversals of deferred tax items. These assessments involve a degree of subjectivity and may undergo significant change. At December 31, 2023, we had net capital loss carryforwards of $12 million for which we have recorded $12 million of valuation allowances. The capital loss carryforwards if not utilized, will expire beginning in 2025. Realization of this tax benefit is dependent upon Key's ability to generate sufficient capital gain in an appropriate tax year to offset the capital loss carryforward. Currently, generation of sufficient gain income is uncertain. At December 31, 2023, we had federal net operating loss carryforwards of $7 million and federal credit carryforwards of $2 million. The federal net operating loss carryforwards are from prior acquisitions by First Niagara and are subject to annual limitations under the tax code and, if not utilized, will expire in the years beginning 2027. The federal credit carryforward consists of general business credits which expire in 2027, under the Internal Revenue Code. We currently expect to fully utilize these losses and credits. We had state net operating loss carryforwards of $23 million, resulting in a net state deferred tax asset of $1 million. The following table shows how our total income tax expense (benefit) and the resulting effective tax rate were derived:
Year ended December 31, Dollars in millions | 2023 |  | 2022 |  | 2021
Amount | Rate |  | Amount | Rate |  | Amount | Rate
Income (loss) before income taxes times 21% statutory federal tax rate | $ | 244 |  | 21.0 | % |  | $ | 490 |  | 21.0 | % |  | $ | 683 |  | 21.0 | %
Amortization of tax-advantaged investments | 171 |  | 14.8 |  |  | 149 |  | 6.4 |  |  | 151 |  | 4.6 |
Tax-exempt interest income | (35) |  | (3.1) |  |  | (28) |  | (1.2) |  |  | (26) |  | (.8) |
Corporate-owned life insurance income | (28) |  | (2.4) |  |  | (28) |  | (1.2) |  |  | (27) |  | (.8) |
State income tax, net of federal tax benefit | 18 |  | 1.6 |  |  | 53 |  | 2.3 |  |  | 79 |  | 2.4 |
Tax credits | (196) |  | (16.9) |  |  | (204) |  | (8.8) |  |  | (218) |  | (6.7) |
FDIC Insurance | 22 |  | 1.9 |  |  | 12 |  | .5 |  |  | 7 |  | .3 |
Other | — |  | — |  |  | (22) |  | (.9) |  |  | (7) |  | (.3) |
Total income tax expense (benefit) | $ | 196 |  | 16.9 | % |  | $ | 422 |  | 18.1 | % |  | $ | 642 |  | 19.7 | %
Liability for Unrecognized Tax Benefits The change in our liability for unrecognized tax benefits is as follows:
Year ended December 31, Dollars in millions | 2023 | 2022
Balance at beginning of year | $ | 40 |  | $ | 50 |
Increase for other tax positions of prior years | 5 |  | 4 |
Decrease for payments and settlements | — |  | — |
Decrease related to tax positions taken in prior years | — |  | (14) |
Balance at end of year | $ | 45 |  | $ | 40 |
Each quarter, we review the amount of unrecognized tax benefits recorded in accordance with the applicable accounting guidance. Any adjustment to unrecognized tax benefits is recorded in income tax expense. The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate was $45 million at December 31, 2023, and $40 million at December 31, 2022. It is reasonably possible that the balance of unrecognized tax benefits could decrease in the next twelve months due to examinations by various tax authorities or the expiration of statutes of limitations. As permitted under the applicable accounting guidance, it is our policy to record interest and penalties related to unrecognized tax benefits in income tax expense. We recorded net interest benefit of $4 million, $1.5 million, and $0.1 million in 2023, 2022, and 2021, respectively. We did not recover any state tax penalties in 2023, 2022, or 2021. At December 31, 2023, we had $0.6 million accrued interest payable, compared to none at December 31, 2022. There were no unrecognized tax benefits presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, at December 31, 2023 and December 31, 2022, respectively. The BEPS 2.0/Pillar Two proposals issued by the Organization for Economic Co-operation and Development focus on global profit allocation and a global minimum tax rate. While we continue to analyze the tax implications of BEPS 2.0/Pillar Two, we do not currently anticipate that the implementation of tax laws aligned with the BEPS 2.0/Pillar Two proposals will have a material impact on KeyCorp’s income tax expense. We file federal income tax returns, as well as returns in various state and foreign jurisdictions. We are subject to income tax examination by the IRS for the tax years 2016, and 2019 and forward. Currently, we are under IRS audit for tax year 2016. We are not subject to income tax examinations by other tax authorities for years prior to 2014. Pre-1988 Bank Reserves acquired in a business combination Retained earnings of KeyBank included approximately $92 million of allocated bad debt deductions for which no income taxes have been recorded. Under current federal law, these reserves are subject to recapture into taxable income if KeyBank, or any successor, fails to maintain its bank status under the Internal Revenue Code or makes non-dividend distributions or distributions greater than its accumulated earnings and profits. No deferred tax liability has been established as these events are not expected to occur in the foreseeable future.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration