IRS Announces Increase In Standard Mileage Rates For The Second Half Of 2026

The IRS is increasing its standard mileage rates midyear, citing recent increases in fuel prices.

Beginning July 1, 2026, the optional standard mileage rates for the use of a car, van, pickup, or panel truck will be:

• 76 cents per mile driven for business use, up from 72.5 cents.
• 23.5 cents per mile driven for medical purposes, up from 20.5 cents.
• 23.5 cents per mile driven for moving purposes by eligible active-duty members of the Armed Forces and certain members of the intelligence community, up from 20.5 cents.
• 14 cents per mile driven for charitable miles (unchanged).

The revised rates apply to eligible transportation expenses paid or incurred on or after July 1, 2026. The rates originally announced for 2026 continue to apply to expenses paid or incurred from January 1 through June 30, 2026.

That means there are now two sets of standard mileage rates for 2026:

Why Did The IRS Change The Rates Midyear?

The IRS ordinarily sets the optional standard mileage rates just before the tax year. This midyear adjustment was prompted by recent increases in fuel prices.

When the IRS announced the original 2026 rates in late December, gas prices were near their lowest level in years. The national average for regular gasoline was about $2.89 per gallon in December 2025.

As of July 13, 2026, AAA put the national average at roughly $3.87 per gallon, an increase of about 98 cents, or 34%. Much of that increase reflects the disruption and uncertainty in global oil markets caused by the war in Iran, including concerns about production and the movement of oil through the Strait of Hormuz.

As a result, the IRS increased the mileage rates.

The IRS last made a midyear mileage-rate adjustment in 2022, after gasoline prices surged following Russia’s invasion of Ukraine. The national average reached roughly $5 per gallon that June, amid higher crude oil prices, sanctions, and concerns about global energy supplies.

Why Are The Business, Medical, Moving and Charitable Mileage Rates Different?

The standard mileage rate for business use is based on an annual study of both the fixed and variable costs of operating an automobile. Those costs include depreciation, insurance, repairs, tires, maintenance, gas, and oil.

By contrast, the rates for medical and moving purposes are based on variable operating costs.

That explains why the business rate is significantly higher than the medical and moving rates—and why all three rates can be affected by higher fuel prices.

Why Didn’t The Charitable Mileage Rate Change?

The charitable mileage rate has been fixed at 14 cents per mile since 1998. Had it kept pace with inflation, it would be about 29 cents per mile today—more than double the statutory rate.

According to a 1997 Treasury letter, the charitable rate was set lower than the business rate largely because it excludes costs like depreciation, insurance, and repairs. Those expenses are not deductible as charitable contributions under section 170 of the tax code.

How Long Has The Mileage Rate Been In Use?

The standard mileage rate dates back to the 1970s. It was introduced as a simplification measure to reduce recordkeeping and paperwork.

In 1971, the IRS formally published a standard mileage rate of 10 cents per mile for business use. Adjusted for inflation, that would be roughly 84 cents per mile today.

Even after the midyear increase to 76 cents, the current business rate remains slightly lower than the inflation-adjusted original rate.

How Do You Use The Mileage Rates?

Standard mileage rates are used to calculate deductible business, moving, medical, or charitable transportation expenses. Generally, you multiply the number of qualifying miles driven by the applicable rate.

For 2026, however, you will also need to know when the mileage occurred:

• Use the original rate for qualifying mileage from January 1 through June 30.
• Use the revised rate for qualifying mileage from July 1 through December 31.

If you use the standard mileage rate for a vehicle you own and use for business, you must generally choose that method in the first year the automobile is available for business use. In later years, you may generally choose between the standard mileage rate and actual expenses.

If you use the standard mileage rate for a leased vehicle, you must use that method for the entire lease period, including renewals.

If you use your vehicle for more than one purpose, you will need to separate personal mileage from deductible mileage. You may also use more than one mileage rate on the same tax return.

And this year, you may need to use two different rates for the same kind of mileage.

How The Math Works For Mileage Rate Deductions

Let’s say that you drive 20,000 miles during 2026. Of those miles:

• 10,000 are personal miles.
• 2,000 are charitable miles.
• 4,000 are medical miles driven before July 1.
• 4,000 are medical miles driven on or after July 1.

You would calculate the mileage as follows:

• 10,000 personal miles × $0 = $0
• 2,000 charitable miles × $0.14 = $280
• 4,000 medical miles × $0.205 = $820
• 4,000 medical miles × $0.235 = $940

In this example, your deductible mileage-related expenses would be $2,040, plus qualifying parking fees and tolls.

Charitable and medical mileage deductions are generally reported on Schedule A. Keep in mind that medical expenses remain subject to the 7.5% adjusted gross income (AGI) floor. And, beginning in 2026, taxpayers who itemize may deduct charitable contributions only to the extent that their total contributions exceed 0.5% of AGI.

If the standard mileage rates do not reflect your costs, you may be able to deduct actual vehicle expenses instead. The downside? That method requires considerably more recordkeeping.

What About Employer Reimbursements?

The timing rules also matter for mileage allowances paid by employers. The revised rates apply when both of the following are true:

1. The mileage allowance is paid to the employee on or after July 1, 2026.
2. The related transportation expense was paid or incurred by the employee on or after July 1, 2026.

The original rates continue to apply if the allowance was paid before July 1 or relates to transportation expenses paid or incurred before July 1.

That means employers should review their accountable plan policies to ensure that the correct rate is applied based on when the expense was incurred and the allowance was paid.

Employer reimbursement plans are programs that do exactly what they sound like: they give money back to workers for approved business, travel, or medical costs. To qualify as an accountable plan, it must meet strict IRS guidelines. That means the expenses must be incurred while performing job duties, employees must submit detailed receipts to support the expenses, and employees must return any excess reimbursements within a reasonable time.

Who Benefits From Using The Mileage Rates?

Before 2018, unreimbursed employee business expenses could generally be claimed as miscellaneous itemized deductions, subject to the 2% of AGI floor. The Tax Cuts and Jobs Act (TCJA) suspended those deductions for 2018 through 2025. Now, thanks to the One Big Beautiful Bill Act (OBBBA), that treatment is permanent. That means most employees cannot claim a federal deduction for unreimbursed employee travel expenses. That makes those employer reimbursement plans particularly important.

Similarly, most taxpayers cannot deduct moving expenses (also thanks to the TCJA and OBBBA). An exception applies to qualifying active-duty members of the Armed Forces who move under military orders due to a permanent change of station. Certain members of the intelligence community may also qualify under rules effective for 2026.

Since you must itemize your deductions to claim charitable mileage, many taxpayers skip it altogether. Instead, they claim the standard deduction—for 2026, it’s $16,100 for single filers and $32,200 for married couples filing jointly.

Still, the charitable rate remains important to organizations and volunteers because it may serve as a guideline for mileage reimbursements.

How Can I Track Mileage?

You must keep adequate records, such as a mileage log. If a vehicle is used solely for business, beginning- and end-of-year odometer readings can help establish total mileage (consider taking photos as supporting evidence). You should keep excellent records showing the dates, destinations, and business purposes of the vehicle’s use.

If you use a personal vehicle for both business and personal purposes, you will need more detailed records. A mileage-tracking app can help, but you can also use a notebook or spreadsheet.

Your records should generally include:

• The date of each trip.
• The number of miles driven.
• Your starting point and destination.
• The business, medical, moving, or charitable purpose of the trip.

For 2026, it will be especially important to distinguish mileage driven before July 1 from mileage driven on or after July 1.

Where Can I Find More Information?

The original 2026 standard mileage rates were published in Notice 2026-10. The IRS modified those rates in Announcement 2026-11, which applies beginning July 1, 2026. All other provisions of Notice 2026-10 remain in effect.

Notice 2026-10 also includes the maximum automobile cost used to calculate allowances under fixed and variable rate plans (FAVR plans) and the maximum fair market value of certain employer-provided automobiles for purposes of the cents-per-mile and fleet-average valuation rules.

What’s Next For Taxpayers?

It’s always important to keep good records. But with the change in mileage rates, 2026 mileage records need to be more precise than usual. The dates will matter, so records should show when the miles were driven to apply the correct rate.

If you have questions, check with your tax pro.