EW · 10-Q · 2026Q2 · Full report
Income Tax Rate Changes
Edwards Lifesciences Corp · 2026-08-04 · Importance 53 · Surprise 60 · Matches filing data
California budget legislation enacted June 29, 2026 permanently limits utilization of most business tax credits, including research and development tax-credit carryforwards. Edwards recorded a $188.2 million valuation allowance against certain deferred tax assets in the second quarter of 2026 because the California R&D credit carryforward was no longer considered realizable. The company expects OECD Pillar Two global minimum-tax provisions to create approximately $50.0 million of additional 2026 tax expense before offsets under current law. The Pillar Two rules impose a 15% minimum tax, while the OECD’s January 2026 Side-by-Side Safe Harbour may reduce UTPR expense as jurisdictions adopt it during 2026.
Key facts
- Edwards recorded a $188.2 million valuation allowance against certain deferred tax assets in Q2 2026 due to enactment of California budget legislation on June 29, 2026. source
- Edwards expects the Pillar Two provisions to result in additional tax expense of approximately $50.0 million in 2026 prior to offsets under current law. source
- Effective income tax rate attributable to continuing operations was 53.6% and 16.1% for the three months ended June 30, 2026 and 2025, respectively, and 36.4% and 16.1% for the six months ended June 30, 2026 and 2025, respectively. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| net_income | negative | realized | -10.8% | Edwards recorded a $188.2 million valuation allowance against certain deferred tax assets in Q2 2026 due to enactment of California budget… |
| net_income | negative | probable | -1.4% | Edwards expects the Pillar Two provisions to result in additional tax expense of approximately $50.0 million in 2026 prior to offsets… |