What’s New

IRS Increases Mileage Rate To 76 Cents for Second Half of 2026

The IRS announced it is increasing the business standard mileage rate for transportation expenses paid or incurred beginning July 1 to 76 cents per mile [Announcement 2026-11, 2026-29 IRB 49]. The change results from recent increases in fuel prices, although the rate applies to all electric, hybrid-electric, gasoline, and diesel vehicles.

 The previous rate of 72.5 cents per mile will still apply for travel between January 1 and June 30, 2026.

 The mileage rate may be used to compute the amount to reimburse employees who use their own cars for business purposes. It may also be used by employers that elect to use the “cents-per-mile” valuation method for purposes of determining the amount that needs to be imputed to an employee’s income for personal use of certain company-owned or leased nonluxury vehicles (see The Payroll Source®, §3.2-2). However, it may not be used by employees in claiming a tax deduction for unreimbursed employee business expenses, since such deductions are permanently disallowed by Public Law 119-21, known as the One Big Beautiful Bill Act.

 In addition, beginning July 1, the standard rate for miles driven for medical or moving purposes increases to 23.5 cents per mile (from 20.5 cents per mile). The deduction for moving expenses only applies to members of the Armed Forces on active duty who move under a military order and due to a permanent change of station and certain members of the intelligence community.

 The standard mileage rate for operating a passenger car for charitable purposes remains 14 cents per mile.