PH · 10-K · 2026A · Full report

Income Tax Rate Changes

Parker-Hannifin Corp · 2026-08-21 · Importance 39 · Surprise 38

Parker's effective tax rate increased to 20.0% in fiscal 2026 from 14.0% in fiscal 2025, a 6.0-percentage-point increase. The 2026 rate remained below the 21% U.S. federal statutory rate due to share-based compensation, foreign-derived intangible income, and U.S. federal income tax credits. The 2025 rate benefited in part from a release of a foreign valuation allowance and a tax benefit related to a lower taxable gain on divestitures.

Key facts

• Parker-Hannifin's effective tax rate was 20.0% in 2026, compared with 14.0% in 2025. source
• The 2026 effective tax rate was below the 21% U.S. federal statutory rate due to share-based compensation, foreign-derived intangible income and U.S. federal income tax credits, partly offset by U.S. state and local taxes and foreign-jurisdiction tax effects. source
• The 2025 effective tax rate was below the 21% U.S. federal statutory rate partly due to release of a foreign valuation allowance, share-based compensation, foreign-derived intangible income and a tax benefit from a lower taxable divestiture gain than the GAAP gain. source