QCOM · 10-K · 2026A · Full report

Income Tax Rate Changes

QUALCOMM INC/DE · 2026-11-04 · Importance 65 · Surprise 60

Qualcomm recorded a $5.7 billion income tax benefit in the second quarter of fiscal 2026 after releasing its federal deferred tax asset valuation allowance. The release followed Treasury and IRS Notice 2026-07, which allows certain previously capitalized domestic R&D expenditures to reduce CAMT and led the company to expect it would not be subject to CAMT in the foreseeable future. Fiscal 2026 income tax benefit was $4.214 billion, compared with income tax expense of $7.122 billion in fiscal 2025, and the fiscal 2026 effective tax rate was negative 45%. Changes to the FDDEI benefit and domestic R&D deductions under the OBBB also affected the tax comparison.

Key facts

• QUALCOMM INC/DE recorded a $5.7 billion income tax benefit in the second quarter of fiscal 2026 from releasing a valuation allowance established in the fourth quarter of fiscal 2025, after new CAMT guidance led it to expect to realize substantially all existing federal deferred tax assets. source
• Based on fiscal 2026 results, a one-percentage-point increase in QUALCOMM INC/DE's annual effective tax rate would increase income tax expense by $94 million. source