INCOME TAXES

3 Months Ended

Mar. 31, 2021

INCOME TAXES


	First Quarter
(Dollars in millions)	2021				2020
	$		%		$		%
Provision for income taxes and tax rate	$	62	18	%	$	56	18	%

First quarter 2021 and 2020 effective tax rates included adjustments to the tax provision to reflect adjustments of prior years' income tax returns.

At March 31, 2021 and December 31, 2020, Eastman had $256 million and $257 million, respectively, in unrecognized tax benefits. At March 31, 2021, it is reasonably possible that, as a result of the resolution of federal, state, and foreign examinations and appeals, and the expiration of various statutes of limitation, the total amounts of unrecognized tax benefits could decrease within the next 12 months by up to $70 million.

Income tax incentives, in the form of tax holidays, have been granted to the Company in certain jurisdictions to attract investment and encourage industrial development. The expiration of these tax holidays varies by country. The tax holidays are conditional on the Company meeting certain requirements, including employment and investment thresholds; determination of compliance with these conditions may be subject to challenge by tax authorities in those jurisdictions. No individual tax holiday had a material impact to the Company's earnings in first quarter 2021 or 2020.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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