CTSH · 10-Q · 2026Q3 · Full report

U.S. Tax Law Changes

COGNIZANT TECHNOLOGY SOLUTIONS CORP · 2026-10-29 · Importance 49 · Surprise 60

The U.S. One Big Beautiful Bill Act (OBBBA) was enacted in July 2025 and repealed the requirement to capitalize U.S. research and experimental costs.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 research and experimental costs capitalized outside the United States. It therefore recorded a one-time, non-cash income tax expense of $390 million in the third quarter of 2025, affecting GAAP diluted EPS by $0.80.

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