UNP · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

UNION PACIFIC CORP · 2026-10-22 · Importance 41 · Surprise 48 · In source text

Income tax expense increased 23% in the third quarter and 19% in the first nine months of 2026, driven by higher pretax income and lower deferred tax adjustments. The effective tax rate rose to 23.8% from 22.9% for the quarter and to 23.2% from 21.7% year to date. Second-quarter 2026 state tax law changes and other state tax matters reduced deferred tax expense by $27 million. The comparable 2025 year-to-date period included a $115 million deferred tax expense reduction from Kansas corporate income tax apportionment legislation.

Key facts

• UNION PACIFIC CORP income tax expense increased 23% in third-quarter 2026 and 19% year to date compared with 2025, driven by higher pre-tax income and lower deferred tax adjustments. source
• UNION PACIFIC CORP recorded a $27 million reduction in deferred tax expense in year-to-date 2026 due to second-quarter changes in state tax laws and other state tax matters. source
• UNION PACIFIC CORP effective tax rates were 23.8% and 22.9% for third-quarter 2026 and 2025, respectively, and 23.2% and 21.7% for the nine-month periods, respectively. source

Impact estimates