TXT · 10-Q · 2026Q4 · Full report

Income Tax Rate Changes

TEXTRON INC · 2026-10-29 · Importance 46 · Surprise 56

Textron’s effective tax rate was 16.1% in the third quarter and 17.4% in the first nine months of 2026, compared with 25.6% and 19.9%, respectively, in 2025. The 2026 rates were below the 21% U.S. federal statutory rate, primarily because of research and development credits and tax deductions for foreign-derived deduction eligible income. Those benefits were partly offset by additional tax provision from repatriation of cash related to non-U.S. jurisdictions in the third quarter of 2026. The third-quarter 2025 rate exceeded 21%, largely due to provisions of the One Big Beautiful Bill Act affecting foreign-derived intangible income deductions and research and development credits.

Key facts

• TEXTRON INC’s effective tax rate was 16.1% for the third quarter and 17.4% for the first nine months of 2026, below the 21% U.S. federal statutory rate. source
• TEXTRON INC’s 2026 tax rate benefited from research and development credits and deductions for foreign-derived deduction eligible income, with some benefit offset by tax provision from repatriating non-U.S. cash in the third quarter. source
• TEXTRON INC’s effective tax rate was 25.6% in the third quarter of 2025 and 19.9% in the first nine months of 2025. source