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Income Taxes
 12 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of the Company’s income tax provision from continuing operations are as follows (in millions):
 202520242023
Tax expense at Ireland statutory rate of 12.5%
$246 $190 $139 
U.S. state income tax, net of federal benefit60 42 30 
Income subject to the U.S. federal tax rate
117 63 42 
Income subject to rates different than the statutory rate(181)(204)44 
Reserve and valuation allowance adjustments14 (139)(559)
Intellectual property transactions and adjustments— — (176)
Impact of acquisitions and divestitures— 121 — 
Restructuring and impairment costs(11)38 12 
Income tax provision (benefit)$245 $111 $(468)
Effective tax rate12 %7 %(42)%

For fiscal 2025, the effective tax rate for continuing operations was 12% and was lower than the statutory tax rate primarily due to the favorable impact of impairment and restructuring charges and the benefits of continuing global tax planning initiatives, partially offset by the unfavorable impact of tax audit resolutions.

For fiscal 2024, the effective tax rate for continuing operations was 7% and was lower than the statutory tax rate primarily due to tax reserve adjustments as the result of tax audit resolutions and expired statute of limitations for certain tax years, valuation allowance adjustments and the benefits of continuing global tax planning initiatives, partially offset by the establishment of a deferred tax liability on the outside basis difference of the Company’s investment in certain subsidiaries as a result of the planned divestiture of its R&LC HVAC business and the unfavorable impact of impairment and restructuring charges.

For fiscal 2023, the effective tax rate for continuing operations was (42)% and was lower than the statutory tax rate primarily due to the favorable tax impacts of intellectual property tax adjustments, tax reserve adjustments as the result of tax audit resolutions and remeasurements, valuation allowance adjustments and the benefits of continuing global tax planning initiatives, partially offset by the unfavorable impact of impairment and restructuring charges.
Valuation Allowances

The Company reviews the realizability of its deferred tax assets and related valuation allowances on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset are considered, along with any other positive or negative evidence. Since future financial results may differ from previous estimates, periodic adjustments to the Company’s valuation allowances may be necessary.

In fiscal 2024, due to changes in forecasted taxable income, the Company determined that it was more likely than not that certain deferred tax assets of Mexico and Germany would be realized. The valuation allowance adjustment resulted in a tax benefit of $48 million.

In fiscal 2023, due to changes in forecasted taxable income, the Company determined that it was more likely than not that certain deferred tax assets of Canada, Mexico, and Spain would be realized. The valuation allowance adjustment resulted in a tax benefit of $121 million.

The following table summarizes changes in the valuation allowance (in millions):
202520242023
Balance at beginning of period$6,258 $6,279 $5,906 
Allowance provision for new operating and other loss carryforwards134 215 544 
Allowance reductions(136)(236)(171)
Balance at end of period$6,256 $6,258 $6,279 

Uncertain Tax Positions

The Company is subject to income taxes in the U.S. and numerous non-U.S. jurisdictions. Judgment is required in determining the worldwide provision for income taxes and recording the related assets and liabilities. In the ordinary course of the Company’s business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
202520242023
Beginning balance, October 1$2,053 $2,158 $2,485 
Additions for tax positions related to the current year62 39 59 
Additions for tax positions of prior years21 53 89 
Reductions for tax positions of prior years(62)(35)(23)
Settlements with taxing authorities(65)(35)(6)
Statute closings and audit resolutions(82)(127)(446)
Ending balance, September 30$1,927 $2,053 $2,158 

The following table summarizes tax effected unrecognized tax benefits that, if recognized, would impact the effective tax rate and the related accrued interest, net of tax benefit (in millions):
September 30,
202520242023
Tax effected unrecognized tax benefits that, if recognized, would affect the effective tax rate$1,427 $1,466 $1,533 
Net accrued interest459 398 329 
In the U.S., fiscal years 2019 through 2020 are currently under audit and fiscal years 2017 through 2018 are currently under appeal with the Internal Revenue Service (“IRS”) for certain legal entities. Additionally, the Company is currently under exam in the following major non-U.S. jurisdictions for continuing operations:
 
Tax JurisdictionTax Years Covered
Belgium2016 - 2017; 2019-2020
Germany
2007 - 2021
Mexico2016; 2018 - 2019
United Kingdom
2014 - 2015; 2018; 2020 - 2021

It is reasonably possible that certain tax examinations and/or tax litigation will conclude within the next twelve months, which could have a material impact on tax expense. Based upon the circumstances surrounding these examinations, the impact is not currently quantifiable.

Other Tax Matters

During fiscal 2025, 2024 and 2023, the Company incurred charges for restructuring and impairment costs of $546 million, $510 million and $1,049 million, which generated tax benefits of $80 million, $26 million and $120 million, respectively.

Impacts of Tax Legislation and Change in Statutory Tax Rates

On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was signed into law by the president of the United States. It includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both U.S. and non-U.S.), and expanding certain Inflation Reduction Act incentives while accelerating the phase-out of others. The impact on tax expense in the 2025 fiscal year is not material and the Company does not anticipate the OBBB to have a material impact on tax expense in subsequent years.

On December 18, 2023, the president of Ireland signed into law the Finance (No. 2) Bill 2023, which included legislation regarding the implementation of the Pillar Two global minimum tax. The Pillar Two legislation went into effect for the Company’s 2025 fiscal year. The impact on tax expense in the 2025 fiscal year is not material.

On September 11, 2023, the Schaffhausen parliament approved a partial revision of the cantonal act on direct taxation: Immediate Minimum Taxation Measure (“IMTM”). On November 19, 2023, IMTM was approved in a public referendum in the canton of Schaffhausen, was published in the cantonal official gazette on December 8, 2023, and was effective starting January 1, 2024. The IMTM increased Switzerland's combined statutory income tax rate to approximately 15%. As a result, in fiscal 2024, the Company recorded a noncash discrete net tax benefit of $80 million due to the remeasurement of deferred tax assets and liabilities related to Switzerland and the canton of Schaffhausen.

During fiscal 2025, 2024 and 2023, other tax legislation was adopted in various jurisdictions. These law changes did not have a material impact on the Company's consolidated financial statements.
Selected Income Tax Data

Selected income tax data related to continuing operations were as follows (in millions):
 202520242023
Components of income (loss) from continuing operations before income taxes:
U.S. $(309)$(406)$(325)
Non-U.S.2,278 1,928 1,438 
Income from continuing operations before income taxes$1,969 $1,522 $1,113 
Components of the provision (benefit) for income taxes:
Current
U.S. federal$(239)$330 $(201)
U.S. state(12)86 94 
Non-U.S.302 102 289 
51 518 182 
Deferred
U.S. federal385 (299)(267)
U.S. state79 (26)(25)
Non-U.S.(270)(82)(358)
194 (407)(650)
Income tax provision (benefit)$245 $111 $(468)
Income taxes paid (1)
$606 $704 $294 

(1) The Company also paid $1.4 billion of taxes related to the operation and disposition of the Residential & Light Commercial HVAC Business, which is reported through Discontinued Operations.

At September 30, 2025 and 2024, the Company recorded within the consolidated statements of financial position in other current assets approximately $562 million and $100 million, respectively, of income tax assets. At September 30, 2025 and 2024, the Company recorded within the consolidated statements of financial position in other current liabilities approximately $176 million and $211 million, respectively, of accrued income tax liabilities.

At September 30, 2025, the Company has not provided U.S. or non-U.S. income taxes on approximately $22.7 billion of outside basis differences of consolidated subsidiaries of Johnson Controls International plc. The Company is indefinitely reinvested in these basis differences. The reduction of the outside basis differences via the sale or liquidation of these subsidiaries and/or distributions could create taxable income. The Company's intent is to reduce the outside basis differences only when it would be tax efficient. Given the numerous ways in which the basis differences may be reduced, it is not practicable to estimate the amount of unrecognized withholding taxes and deferred tax liability on the outside basis differences.

Deferred taxes were classified in the consolidated statements of financial position as follows (in millions):
 September 30,
 20252024
Other noncurrent assets$1,777 $1,969 
Other noncurrent liabilities(185)(301)
Net deferred tax asset$1,592 $1,668 
Temporary differences and carryforwards which gave rise to deferred tax assets and liabilities included (in millions):
 
 September 30,
 20252024
Deferred tax assets
Accrued expenses and reserves$424 $661 
Employee and retiree benefits38 43 
Property, plant and equipment522 729 
Net operating loss and other credit carryforwards6,963 6,628 
Research and development233 219 
Intangible assets137 306 
Operating lease liabilities327 294 
Other, net315 455 
8,959 9,335 
Valuation allowances(6,256)(6,258)
2,703 3,077 
Deferred tax liabilities
Subsidiaries, joint ventures and partnerships193 440 
Operating lease right-of-use assets327 294 
Other liabilities591 675 
1,111 1,409 
Net deferred tax asset$1,592 $1,668 

At September 30, 2025, the Company had available net operating loss carryforwards of approximately $26.1 billion, of which $15.7 billion will expire at various dates between 2026 and 2045, and the remainder has an indefinite carryforward period. The Company had available U.S. foreign tax credit carryforwards at September 30, 2025 of $35 million which will expire in 2029. The valuation allowance, generally, is for loss and credit carryforwards for which realization is uncertain because it is unlikely that the losses and/or credits will be realized given the lack of sustained profitability and/or limited carryforward periods in certain countries.