Reminder of IRS Mileage Rate Changes in 2026

Published Oct 5, 2026

GOMEZ CPA | Insights

Reminder to update your records

The IRS set the 2026 business mileage rate at 72.5 cents per mile in December 2025 (Notice 2026-10), then raised it midyear to 76 cents per mile effective July 1, 2026 (Announcement 2026-11), the first midyear increase since 2022. If your accountable plan, client bill-back rates, or reimbursement policy still says 72.5 cents, it's been wrong for months.

The 2026 rates, both halves

For January 1 through June 30, 2026, the rates were 72.5 cents per mile for business use, 20.5 cents for medical and moving purposes, and 14 cents for charitable use.

For July 1 through December 31, 2026, the business rate rose to 76 cents per mile and medical/moving to 23.5 cents, while the charitable rate held at 14 cents.

The charitable rate is fixed by statute at 14 cents (IRC §170(i)) and never moves. The medical and moving rates (23.5 cents from July) cover only variable costs, which is why they run lower. The moving deduction remains limited to qualifying military and intelligence-community moves.

A few details worth knowing:

The depreciation component of the business rate is 35 cents per mile for 2026. That reduces your vehicle's basis, which matters when you sell.
FAVR plans (fixed-and-variable-rate reimbursements) max out at a $61,700 standard automobile cost for 2026.
The rates apply to electric and hybrid vehicles the same as gas and diesel.

What to do now

Update your accountable plan reimbursement rate to 76 cents for mileage on or after July 1, 2026. Reimbursements under an accountable plan (IRC §62(a)(2)(A)) stay tax-free to the employee and deductible to the business, but only if the plan is documented and followed.
Keep a split-year mileage log. Date, miles, business purpose, contemporaneous, not reconstructed in April (see the adequate-records rules of IRC §274(d)). You'll need both rates represented.
Check client bill-back and per-diem schedules that reference the old rate.
Review FAVR arrangements against the new $61,700 ceiling.

The bottom line

Three and a half cents a mile sounds trivial until you multiply it across a sales team or a year of client visits. The midyear change is a small reminder that your reimbursement policies are living documents and must be updated on an on-going basis.

Sources

IRS Notice 2026-10 (IR-2025-128, Dec. 29, 2025) — 2026 rates: 72.5¢ business / 20.5¢ medical & moving / 14¢ charitable; FAVR maximum standard automobile cost $61,700; depreciation component 35¢/mile
IRS Announcement 2026-11 (IR-2026-29) — midyear increase effective July 1, 2026: 76¢ business / 23.5¢ medical & moving
IRC §162 (ordinary and necessary business expenses); §274(d) (substantiation of vehicle expenses); §280F (listed property); §170(i) (charitable mileage rate); §62(a)(2)(A) (accountable plans)
Rev. Proc. 2019-46 (rules for using optional standard mileage rates)

This article is for informational and educational purposes only and does not constitute tax, legal, accounting, or financial advice; viewers should consult a qualified professional regarding their specific facts and circumstances.