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Eaton says health-care bill will add $25 million to its income taxes

April 1, 2010
Eaton Corp., Cleveland, said the new health care legislation will increase its income tax expense by $25 million through a non-cash, one-time charge taken in the first quarter of 2010. The $25 million charge relates to the write-off of deferred income ...

Eaton Corp., Cleveland, said the new health care legislation will increase its income tax expense by $25 million through a non-cash, one-time charge taken in the first quarter of 2010. The $25 million charge relates to the write-off of deferred income tax assets because the new law eliminates the non-taxable nature of the retiree drug subsidy received by the company. Although this change in income tax deductibility does not take effect until 2013, Eaton is required to recognize the charge in the first quarter of 2010 when the Act was signed into law. This charge was not considered in guidance for first quarter or full year 2010.