Income taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

BNY Mellon recorded an income tax provision of $219 million (18.8% effective tax rate) in the third quarter of 2021, $213 million (18.4% effective tax rate) in the third quarter of 2020 and $241 million (19.0% effective tax rate) in the second quarter of 2021.

Our total tax reserves as of Sept. 30, 2021 were $120 million compared with $119 million at Dec. 31, 2020. If these tax reserves were unnecessary, $120 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 Sept. 30, 2021 is accrued interest, where applicable, of $33 million. The additional tax expense related to interest for the nine months ended Sept. 30, 2021 was $6 million, compared with $5 million for the nine months ended Sept. 30, 2020.

It is reasonably possible the total reserve for uncertain tax positions could decrease within the next 12 months by approximately $1 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 2016. Our New York State income tax returns are closed to examination through 2014. Our New York City income tax returns are closed to examination through 2012. Our UK income tax returns are closed to examination through 2018.