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Income Taxes
 6 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE J – INCOME TAXES

Current fiscal year

Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The effective tax rate was 25% and 80% for the three and six months ended March 31, 2026, respectively. The tax rate for the three months ended March 31, 2026, was primarily impacted by jurisdictional income mix and a net $1 million from favorable tax discrete items primarily related to changes in uncertain tax positions. The tax rate for the six months ended March 31, 2026, was primarily impacted by jurisdictional income mix, as well as a net $1 million from unfavorable tax discrete items primarily related to equity compensation adjustments and changes in uncertain tax positions.

Prior fiscal year

The effective tax rate was 23% and 20% for the three and six months ended March 31, 2025, respectively. The tax rate for the three months ended March 31, 2025, was primarily impacted by jurisdictional income mix. The tax rate for the six months ended March 31, 2025, was impacted by jurisdictional income mix, as well as a net $7 million from unfavorable tax discrete items primarily related to changes in foreign tax activity and final regulations issued in the U.S. impacting the recognition of deferred taxes on certain unrealized foreign exchange gains and losses.

Unrecognized tax benefits

Changes in unrecognized tax benefits are summarized as follows for the six months ended March 31, 2026:

 

(In millions)

 

 

Balance at October 1, 2025

$

65

 

Decreases related to positions taken on items from prior years

 

(2

)

Increases related to positions taken in the current year

 

1

 

Increases related to positions taken in the prior year

 

1

 

Balance at March 31, 2026

$

65

 

 

 

 

 

From a combination of statute expirations and audit settlements in the next twelve months, Ashland expects a decrease in the amount of accrual for uncertain tax positions between zero and $1 million for continuing operations. For the remaining balance as of March 31, 2026, it is reasonably possible that there could be material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues, reassessment of existing uncertain tax positions or the expiration of applicable statute of limitations; however, Ashland is not able to estimate the impact of these items at this time.