CTSH · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

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

The effective tax rate declined year over year in Q3 2026 because Q3 2025 included a one-time, non-cash $390 million tax expense related to the OBBBA. That 2025 charge reduced Q3 2025 GAAP diluted EPS by $0.80 and was added back in adjusted EPS. For the first nine months of 2026, the effective tax rate was 13.3%, with the comparison affected by the 2025 charge and partly offset by multi-year tax planning strategies.

Key facts

• The nine-month 2026 effective tax rate decline versus 2025 reflected the $390 million one-time, non-cash OBBBA tax expense in Q3 2025, partly offset by multi-year tax-planning strategies. source
• Cognizant's Q3 2026 effective tax rate decreased compared with Q3 2025 because of the $390 million one-time, non-cash tax expense related to the OBBBA in Q3 2025. source