CTSH · 8-K · 20261029PR000039

U.S. Tax Law Changes

COGNIZANT TECHNOLOGY SOLUTIONS CORP · 2026-10-29 · Importance 46 · Surprise 42

The One Big Beautiful Bill Act (OBBBA) was enacted in the United States in July 2025 and repealed the requirement to capitalize U.S. research and experimental costs. Cognizant concluded it was not more likely than not to realize a $390 million deferred tax asset related to R&E costs capitalized outside the United States, which otherwise could have offset certain future U.S. taxes on non-U.S. earnings. The company recorded a one-time, non-cash income tax expense of $390 million in the third quarter of 2025.

Key facts

• Cognizant's 2026 U.S. tax-law change-related one-time non-cash income tax expense was $390 million, recorded in the third quarter of 2025 after the OBBBA repealed the requirement to capitalize U.S. research and experimental costs. source
• Cognizant recorded a one-time, non-cash income tax expense of $390 million in the third quarter of 2025 related to the OBBBA. source