Income taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

BNY Mellon recorded an income tax provision of $265 million (21.6% effective tax rate) in the first quarter of 2020, $237 million (19.9% effective tax rate) in the first quarter of 2019 and $373 million (20.5% effective tax rate) in the fourth quarter of 2019.

Our total tax reserves as of March 31, 2020 were $176 million compared with $173 million at Dec. 31, 2019. If these tax reserves were unnecessary, $176 million would affect the effective tax rate in future periods. We recognize accrued interest and penalties, if applicable, related to income taxes in income tax expense. Included in the balance sheet at March 31, 2020 is accrued interest, where applicable, of $35 million. The additional tax expense related to interest for the first quarter of 2020 was $4 million, compared with $2 million for the first quarter of 2019.

It is reasonably possible the total reserve for uncertain tax positions could decrease within the next 12 months by approximately $100 million as a result of adjustments related to tax years that are still subject to examination.

Our federal income tax returns are closed to examination through 2013. Our New York State, New York City and UK income tax returns are closed to examination through 2012.