VZ · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

VERIZON COMMUNICATIONS INC · 2026-10-29 · Importance 18 · Surprise 14

The effective income tax rate decreased to 22.0% in the third quarter of 2026 from 22.5% in the comparable 2025 quarter, while the tax provision increased 1.8% to $1.497 billion. Verizon attributed the quarterly rate decrease primarily to favorable tax legislation and purchases of tax credits. For the first nine months, the effective tax rate increased to 23.6% from 22.7%, while the provision was nearly unchanged at $4.460 billion versus $4.449 billion. The nine-month rate increase was primarily related to the nondeductible loss on classification of the Verizon Contributed Business net assets as held for sale.

Key facts

• After-tax interest and penalties related to Verizon's unrecognized tax benefits were $742 million at September 30, 2026, compared with $751 million at December 31, 2025. source
• Verizon's unrecognized tax benefits were $2.5 billion at September 30, 2026, compared with $2.6 billion at December 31, 2025. source
• Verizon's effective income tax rate was 22.0% for the three months and 23.6% for the nine months ended September 30, 2026, compared with 22.5% and 22.7%, respectively, in 2025. source
• Verizon's nine-month effective income tax rate increased primarily because of the nondeductible loss on classification of the Verizon Contributed Business net assets as held for sale in 2026. source
• Verizon identifies changes in tax laws or regulations, their interpretation, or challenges to its tax positions as potential sources of additional tax expense or liabilities. source
• Verizon's three-month effective income tax rate decreased primarily because of favorable tax-legislation impacts and the purchase of tax credits. source