Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

. Income Taxes – Alcoa Corporation’s estimated annualized effective tax rate (AETR) for 2024 as of March 31, 2024 differs from the U.S. federal statutory rate of 21% primarily due to losses in certain jurisdictions with full valuation allowances resulting in no tax benefit. In addition, losses in foreign jurisdictions with higher statutory tax rates contribute to the variance from 21%.

	First quarter ended March 31,
	2024				2023
Loss before income taxes	$	(325	)		$	(180	)
Estimated annualized effective tax rate		(8.9	)	%		141.4		%
Income tax expense (benefit)	$	29			$	(255	)
(Favorable) unfavorable tax impact related to losses in jurisdictions with no tax benefit		(47	)			305
Discrete tax expense		—				2
(Benefit from) provision for income taxes	$	(18	)		$	52

The Inflation Reduction Act of 2022 (IRA) contains a number of tax credits and other incentives for investments in renewable energy production, carbon capture, and other climate-related actions, as well as the production of critical minerals. In December 2023, the U.S. Treasury issued guidance on Section 45X of the Advanced Manufacturing Tax Credit. The Notice of Proposed Rulemaking (the Notice) clarifies that commercial grade aluminum can qualify for the credit, which was designed to incentivize domestic production of critical materials important for the global transition to renewable energy. In the first quarter of 2024, the Company recorded benefits of $9 in Cost of goods sold related to its Massena West smelter (New York) and its Warrick smelter (Indiana). As of March 31, 2024, benefits of $36 were included in Other receivables and $9 were included in Other noncurrent assets on the Consolidated Balance Sheet. As of December 31, 2023, benefits of $36 were included in Other receivables on the Consolidated Balance Sheet.