Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

M. Income Taxes – Alcoa Corporation’s estimated annualized effective tax rate (AETR) for 2022 as of March 31, 2022 differs from the U.S. federal statutory rate of 21% primarily due to foreign jurisdictions with higher statutory tax rates partially offset by income in certain jurisdictions with full valuation allowances resulting in no additional tax expense.

	Three months ended March 31,
	2022			2021
Income before income taxes	$	763		$	312
Estimated annualized effective tax rate		26.4	%		39.2		%
Income tax expense	$	202		$	122
Unfavorable (favorable) tax impact related to losses in jurisdictions with no tax benefit		7			(28	)
Discrete tax expense (benefit)		1			(1	)
Provision for income taxes	$	210		$	93

The Company’s subsidiaries in Iceland have a full valuation allowance recorded against deferred tax assets, which was established in 2015 and 2017, as the Company believes it is more likely than not that these tax benefits will not be realized. If current market conditions were to continue or improve, management may conclude that Iceland’s deferred tax assets may be realized, resulting in a future reversal of the valuation allowance, generating a non-cash benefit in the period recorded. Iceland’s net deferred tax assets, excluding the valuation allowance, were $166 as of March 31, 2022.