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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Components of Income from Continuing Operations Before Income Taxes
The components of income from continuing operations before income taxes were as follows:
For the year ended December 31,

2019
 
2018
 
2017
United States
$
275

 
$
518

 
$
500

Foreign
300

 
350

 
(30
)
 
$
575

 
$
868

 
$
470
Schedule of Provision for Income Taxes on Income from Continuing Operations
The provision for income taxes consisted of the following:
For the year ended December 31,
2019
 
2018
 
2017
Current:
 
 
 
 
 
Federal(1)
$
4

 
$
45

 
$
—

Foreign
108

 
138

 
98

State and local
5

 
4

 
(2
)
 
117

 
187

 
96

Deferred:
 
 
 
 
 
Federal
65

 
146

 
489

Foreign
(53
)
 
(94
)
 
37

State and local
(24
)
 
(13
)
 
(78
)
 
(12
)
 
39

 
448

Total
$
105

 
$
226

 
$
544

(1) 
Includes U.S. taxes related to foreign income
Reconciliation of U.S. Federal Statutory Rate to Arconic's Effective Tax Rate
A reconciliation of the U.S. federal statutory rate to Arconic’s effective tax rate was as follows (the effective tax rate for all periods was a provision on income):
For the year ended December 31,
2019
 
2018
 
2017
U.S. federal statutory rate
21.0
 %
 
21.0
 %
 
35.0
 %
Foreign tax rate differential
2.6

 
2.4

 
(8.7
)
U.S. and residual tax on foreign earnings
6.0

 
1.6

 
(0.1
)
U.S. State and local taxes
2.5

 
1.5

 
0.7

Federal benefit of state tax
0.4

 
(0.3
)
 
3.7

Permanent differences related to asset disposals and items included in restructuring and other charges(1)
(22.9
)
 
(16.9
)
 
(167.4
)
Non-deductible transaction costs
1.6

 
—

 
0.3

Non-deductible officer compensation
1.8

 
0.1

 
—

Statutory tax rate and law changes(2)
(0.2
)
 
6.5

 
52.5

Tax holidays
(3.2
)
 
(1.6
)
 
(3.0
)
Changes in valuation allowances(3)
(14.2
)
 
0.9

 
137.9

Impairment of goodwill
—

 
—

 
53.5

Changes in uncertain tax positions
6.1

 
12.8

 
10.1

Prior year tax adjustments(4)
15.2

 
(2.6
)
 
(0.9
)
Other
1.6

 
0.6

 
2.1

Effective tax rate
18.3
 %
 
26.0
 %
 
115.7
 %

(1) 
In 2019, a net tax benefit was recognized related to a U.S. tax election which caused the deemed liquidation of a foreign subsidiary's assets into its U.S. tax parent. The benefit is partially offset by an increase in uncertain tax positions. Losses reported in Spain's 2017 tax return related to the Separation of Alcoa are offset by an increased valuation allowance.
(2) 
In 2018, the Company finalized its accounting for the Tax Cuts and Jobs Act of 2017 ("the 2017 Act”) and recorded an additional $59 charge. In December 2017, an estimated $272 tax charge was recorded with respect to the enactment of the 2017 Act.
(3) 
In 2019, the Company released a valuation allowance related to 2015 and 2016 foreign tax credits, subsequent to filing U.S. amended tax returns to deduct, rather than credit, foreign taxes.
(4) 
In 2019, the Company filed U.S. amended tax returns to deduct, rather than credit, 2015 and 2016 foreign taxes resulting in a tax cost associated with the write-off of the deferred tax asset for the credit, partially offset by a tax benefit for the deduction.
Schedule of Components of Net Deferred Tax Assets and Liabilities
The components of net deferred tax assets and liabilities were as follows:
 
2019
 
2018
December 31,
Deferred
tax
assets
 
Deferred
tax
liabilities
 
Deferred
tax
assets
 
Deferred
tax
liabilities
Depreciation
$
25

 
$
729

 
$
38

 
$
694

Employee benefits
887

 
16

 
836

 
27

Loss provisions
92

 
—

 
94

 
—

Deferred income/expense
96

 
943

 
22

 
1,102

Interest
56

 
—

 
—

 
—

Tax loss carryforwards
2,932

 
—

 
3,159

 
—

Tax credit carryforwards
379

 
—

 
579

 
—

Other
52

 
16

 
94

 
20

 
$
4,519

 
$
1,704

 
$
4,822

 
$
1,843

Valuation allowance
(2,256
)
 
—

 
(2,486
)
 
—

 
$
2,263

 
$
1,704

 
$
2,336

 
$
1,843
Schedule of Expiration Periods of Deferred Tax Assets
The following table details the expiration periods of the deferred tax assets presented above:
December 31, 2019
Expires
within
10 years
 
Expires
within
11-20 years
 
No
expiration(1)
 
Other(2)
 
Total
Tax loss carryforwards
$
452

 
$
235

 
$
2,245

 
$
—

 
$
2,932

Tax credit carryforwards
300

 
69

 
10

 
—

 
379

Other
—

 
—

 
120

 
1,088

 
1,208

Valuation allowance
(711
)
 
(176
)
 
(1,306
)
 
(63
)
 
(2,256
)
 
$
41

 
$
128

 
$
1,069

 
$
1,025

 
$
2,263

(1) 
Deferred tax assets with no expiration may still have annual limitations on utilization.
(2) 
Other represents deferred tax assets whose expiration is dependent upon the reversal of the underlying temporary difference. A substantial amount of Other relates to employee benefits that will become deductible for tax purposes over an extended period of time as contributions are made to employee benefit plans and payments are made to retirees.
Schedule of Changes in Valuation Allowance
The following table details the changes in the valuation allowance:
December 31,
2019
 
2018
 
2017
Balance at beginning of year
$
2,486

 
$
2,584

 
$
1,940

Increase to allowance
37

 
136

 
831

Release of allowance
(222
)
 
(154
)
 
(246
)
Acquisitions and divestitures
(2
)
 
—

 
(1
)
Tax apportionment, tax rate and tax law changes
(13
)
 
(14
)
 
(24
)
Foreign currency translation
(30
)
 
(66
)
 
84

Balance at end of year
$
2,256

 
$
2,486

 
$
2,584
Reconciliation of Unrecognized Tax Benefits (Excluding Interest and Penalties)
A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) was as follows:
December 31,
2019
 
2018
 
2017
Balance at beginning of year
$
166

 
$
73

 
$
28

Additions for tax positions of the current year
34

 
—

 
23

Additions for tax positions of prior years
3

 
143

 
27

Reductions for tax positions of prior years
—

 
(42
)
 
—

Settlements with tax authorities
—

 
—

 
—

Expiration of the statute of limitations
(2
)
 
(6
)
 
(5
)
Foreign currency translation
(4
)
 
(2
)
 
—

Balance at end of year
$
197

 
$
166

 
$
73