2026 Mileage Rates Announced by IRS

At the end of December, the IRS announced the standard mileage rates for 2026. Below are the updated deductions if you use an automobile for approved purposes:

• Business use: 72.5 cents per mile (up 2.5 cents from 2025)
• Medical: 20.5 cents per mile (down 0.5 cents from 2025)
• Moving (military & certain intelligence community members only): 20.5 cents per mile (down 0.5 cents)
• Charitable service: 14 cents per mile (unchanged)

The rates apply to gasoline, diesel, hybrid, and fully electric vehicles.

A Few Important Details

The business mileage rate is based on an annual IRS study of the fixed and variable costs of operating a vehicle. The medical and moving rates are based on variable costs only, while the charitable rate is set by statute.

Keep in mind:

• The standard mileage rate is optional. Taxpayers may instead calculate actual vehicle expenses.
• If you choose the standard mileage rate for a vehicle you own, you must use it in the first year the vehicle is available for business use.
• For leased vehicles, the standard mileage method must be used for the entire lease period, including renewals.

Also important for employees: Under current law, most taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, with limited exceptions (such as certain educators, reservists, performing artists, and specific government officials). Moving expense deductions remain limited to qualifying military members and certain intelligence community personnel.

What Employers Should Know

If you reimburse employees for business mileage, now is the time to review your reimbursement policies and ensure your payroll system reflects the updated 2026 rate of 72.5 cents per mile beginning January 1, 2026.

Additional details are available in IRS Notice 2026-10 and on the IRS website. As always, we recommend discussing your specific situation with a tax professional.