Income Taxes

12 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Note 19—Income Taxes

The Company’s income before income taxes by fiscal year consisted of the following:

	For the Years Ended September 30,
	2025		2024		2023
	(in millions)
U.S.	$	14,776	$	14,537	$	13,339
Non-U.S.	9,418		9,379		7,698
Total income before income taxes	$	24,194	$	23,916	$	21,037

For fiscal 2025, 2024 and 2023, U.S. income before income taxes included $6.0 billion, $5.1 billion, and $4.2 billion, respectively, of the Company’s U.S. entities’ income from operations outside of the U.S.

Income tax provision by fiscal year consisted of the following:

	For the Years Ended September 30,
	2025		2024		2023
	(in millions)
Current:
U.S. federal	$	1,879	$	2,694	$	2,630
State and local	251		298		293
Non-U.S.	1,854		1,281		1,324
Total current taxes	3,984		4,273		4,247
Deferred:
U.S. federal	102		(132)		(339)
State and local	9		(18)		(1)
Non-U.S.	41		50		(143)
Total deferred taxes	152		(100)		(483)
Total income tax provision	$	4,136	$	4,173	$	3,764

The following table presents the components of deferred tax assets and liabilities:

	September 30,
	2025		2024
	(in millions)
Deferred tax assets:
Accrued compensation and benefits	$	250	$	221
Accrued litigation	690		374
Client incentives	288		855
Net operating loss carryforwards	258		206
Comprehensive loss	206		79
Federal benefit of state taxes	74		16
Other	26		102
Valuation allowance	(264)		(212)
Total deferred tax assets	1,528		1,641
Deferred tax liabilities:
Property, equipment and technology, net	(296)		(295)
Intangible assets	(6,532)		(6,404)
Unrealized gains on equity securities	(71)		(81)
Foreign taxes	(50)		(22)
Total deferred tax liabilities	(6,949)		(6,802)
Net deferred tax liabilities	$	(5,421)	$	(5,161)

As of September 30, 2025 and 2024, net deferred tax assets of $128 million and $140 million, respectively, were reflected in other assets on the consolidated balance sheets.

Deferred tax assets were reduced by a valuation allowance. The fiscal 2025 and 2024 valuation allowances relate primarily to foreign net operating losses from subsidiaries acquired in recent years. 

As of September 30, 2025, the Company had $1.1 billion of foreign net operating loss carryforwards, which may be carried forward indefinitely.

The following table presents a reconciliation of the income tax provision to the amount of income tax determined by applying the U.S. federal statutory income tax rate to income before income taxes:

	For the Years Ended September 30,
	2025				2024				2023
	(in millions, except percentages)
U.S. federal income tax at statutory rate	$	5,081	21	%	$	5,022	21	%	$	4,418	21	%
State income taxes, net of federal benefit	244		1	%	258		1	%	245		1	%
Non-U.S. tax effect, net of federal benefit	(775)		(3	%)	(828)		(4	%)	(758)		(3	%)
Reassessment of an uncertain tax position	—		—	%	—		—	%	(142)		(1	%)
Conclusion of audits	—		—	%	(223)		(1	%)	—		—	%
Tax position taken on certain expenses	(263)		(1	%)	—		—	%	—		—	%
Other, net	(151)		(1	%)	(56)		—	%	1		—	%
Income tax provision	$	4,136	17	%	$	4,173	17	%	$	3,764	18	%

In fiscal 2025 and fiscal 2024, the effective income tax rates were 17% including the following:

•during fiscal 2025, a $263 million tax benefit as a result of a tax position taken on certain expenses; and

•during fiscal 2024, a $223 million tax benefit as a result of the conclusion of audits.

In fiscal 2024 and fiscal 2023, the effective income tax rates were 17% and 18%, respectively, primarily due to a tax position taken across jurisdictions, as well as the following:

•during fiscal 2024, a $223 million tax benefit as a result of the conclusion of audits; and

•during fiscal 2023, a $142 million tax benefit due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

As of September 30, 2025 and 2024, current income taxes receivable of $232 million and $832 million, respectively, were included in prepaid expenses and other current assets; non-current income taxes receivable of $427 million and $442 million, respectively, were included in other assets; income taxes payable of $512 million and $577 million, respectively, were included in accrued liabilities; and accrued income taxes of $309 million and $1.4 billion, respectively, were included in other liabilities on the consolidated balance sheets.

Effective through September 30, 2028, the Company’s operating hub in the Asia Pacific region is subject to a tax incentive in Singapore which is conditional upon meeting certain requirements. In fiscal 2025, 2024 and 2023, the tax incentive decreased Singapore tax by $453 million, $419 million and $468 million, and the gross benefit of the tax incentive on diluted earnings per share was $0.23, $0.21 and $0.22, respectively.

The Company is required to inventory, evaluate and measure all uncertain tax positions taken or to be taken on tax returns, and to record liabilities for the amount of such positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities.

As of September 30, 2025, 2024 and 2023, the Company’s total gross unrecognized tax benefits were $1.7 billion, $3.8 billion and $3.5 billion, respectively, exclusive of interest and penalties described below. Included in the $1.7 billion, $3.8 billion and $3.5 billion were $1.5 billion, $1.4 billion and $1.6 billion of unrecognized tax benefits, respectively, that if recognized, would reduce the effective tax rate in a future period.

The following table presents a reconciliation of beginning and ending unrecognized tax benefits by fiscal year: 

	2025		2024		2023
	(in millions)
Balance as of beginning of period	$	3,750	$	3,497	$	2,683
Increase related to prior years	281		148		515
Decrease related to prior years	(2,455)		(322)		(190)
Increase related to current year	150		556		510
Decrease related to settlements with taxing authorities	(49)		(127)		(17)
Decrease related to lapsing statute of limitations	(5)		(2)		(4)
Balance as of end of period	$	1,672	$	3,750	$	3,497

In fiscal 2025, the decrease in unrecognized tax benefits primarily reflects a change in gross timing differences as a result of the conclusion of an audit. The increase in unrecognized tax benefits reflects various tax positions across several jurisdictions.

In fiscal 2025, 2024 and 2023, the Company reversed $140 million and recognized $29 million and $34 million of net interest expense, respectively, related to uncertain tax positions. As of September 30, 2025 and 2024, the Company had accrued interest of $160 million and $300 million, respectively, and no significant accrued penalties related to uncertain tax positions.

In fiscal 2025, the Internal Revenue Service completed fieldwork related to the examination of the Company’s U.S. federal income tax returns for fiscal 2016 through 2018. For fiscal 2008 through 2018, an unresolved issue remains related to certain income tax deductions. For fiscal 2008 through 2015, the Company filed a complaint with the U.S. Court of Federal Claims challenging the Internal Revenue Service’s position. Except for this issue, the federal statute of limitations has expired for fiscal years prior to 2016.

In fiscal 2025, the Company’s California income tax examination for fiscal 2012 through 2015 concluded and the Company filed an administrative appeal related to refund claims for those years. The Company’s California income tax returns for fiscal 2016 through 2021 are currently under examination. Except for the refund claims, the California statute of limitations has expired for fiscal years prior to 2016.

India tax authorities completed assessments of the Company’s income tax returns for taxable years falling within the period from fiscal 2019 to 2023. The Company objected to these assessments and filed appeals to the appellate authorities.

The Company is also subject to examinations by various state and foreign tax authorities. All material federal, state and foreign tax matters have been concluded for years through fiscal 2007. The timing and outcome of the final resolutions of the federal, state and foreign tax examinations and refund claims are uncertain. It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next 12 months.