The IRS has increased certain optional standard mileage rates for transportation expenses paid or incurred from July 1 through Dec. 31, 2026. The midyear adjustment reflects rising fuel costs and creates two sets of mileage rates for 2026: one for the first half of the year and another for the second half.
Updated Mileage Rates
Beginning Jan. 1, 2026, the standard mileage rates for the use of a car, as well as vans, pickups, or panel trucks, will be as follows:
- Business: 76 cents per mile, up from 72.5 cents for travel from Jan. 1 through June 30, 2026.
- Medical or qualifying moving: 23.5 cents per mile, up from 20.5 cents. The moving rate applies only to active-duty members of the Armed Forces, and certain members of the intelligence community, who move under military orders.
- Charitable: 14 cents per mile, set by statute and unchanged.
These new rates apply to electric, hybrid-electric, gasoline, and diesel-powered vehicles.
What Employers Should Know
Employers that reimburse employees for business mileage should review their reimbursement policies and expense systems to ensure the correct rate is applied based on when the mileage was driven.
For 2026, mileage incurred before July 1 should generally use the first-half rate, while mileage incurred on or after July 1 should use the updated second-half rate.
Businesses should also remind employees to keep accurate mileage records, including the date, mileage driven, destination, and business purpose. Maintaining clear documentation can help support reimbursement practices and reduce confusion when employees submit mileage expenses spanning both halves of the year.
What is the Optional Standard Mileage Rate?
The optional standard mileage rate simplifies calculating deductible costs for using a car for business purposes. Instead of tracking actual expenses, this rate accounts for fixed and variable costs such as fuel, depreciation, and insurance. The federal government and businesses widely use it as a standard for reimbursing employees for mileage.
More Details on the 2026 Mileage Rates
Taxpayers can always calculate the actual costs of using their vehicle instead of using the standard mileage rates.
For 2026, two IRS documents set the rates:
- Notice 2026-10 covers travel from Jan. 1 through June 30, 2026.
- Announcement 2026-11 covers travel from July 1 through Dec. 31, 2026.
Align Your Policies With CBIZ
Changes to the standard mileage rate can impact payroll administration, expense reimbursement, and overall compliance. At CBIZ, our human capital management specialists help employers align policies with current IRS guidance, so you can reduce risk while supporting employees. Explore CBIZ Human Capital Management solutions to learn more.
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