Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

N. Income Taxes – Alcoa Corporation’s estimated annualized effective tax rate (AETR) for 2021 as of June 30, 2021 differs from the U.S. federal statutory rate of 21% primarily due to losses in countries with full valuation allowances resulting in no tax benefit, as well as foreign income taxed in higher rate jurisdictions.

	Six months ended June 30,
	2021				2020
Income before income taxes	$	773			$	114
Estimated annualized effective tax rate		28.0		%		(183.0	)	%
Income tax expense (benefit)	$	217			$	(209	)
(Unfavorable) favorable tax impact related to losses in jurisdictions with no tax benefit		(12	)			333
Discrete tax (benefit) expense		(1	)			1
Provision for income taxes	$	204			$	125

Alúmina Española, S.A. (Española) has incurred recent operating losses that may result in a three-year cumulative loss position later in 2021. At this point in time, management concluded that the Española’s net deferred tax assets will more likely than not be realized and a valuation allowance has not been recorded against deferred tax assets, but Española’s operating results will continue to be monitored. Upon changes in facts and circumstances, management may conclude that Española’s deferred tax assets may not be realized, resulting in a future charge to establish a valuation allowance. Española’s net deferred tax assets were $103 at June 30, 2021. The majority of Española’s net deferred tax assets relate to prior net operating losses.