The Internal Revenue Service has announced an increase to the optional standard mileage rates used to calculate deductible vehicle costs for business, medical, and certain moving purposes. The revised rates apply to qualifying expenses paid or incurred beginning July 1, 2026, and reflect recent increases in fuel prices.
For the period from July 1 through December 31, 2026, the revised mileage rates are:
- 76 cents per mile for business use
- 5 cents per mile for medical or qualifying moving purposes
- 14 cents per mile for charitable use, which remains unchanged
The rates previously announced for 2026 continue to apply to qualifying transportation expenses paid or incurred before July 1. As a result, taxpayers and businesses will need to separate mileage driven during the first and second halves of the year when calculating deductions or employee reimbursements.
The revised rates also apply to mileage allowances paid to employees on or after July 1, provided the related transportation expenses were also incurred on or after that date. Allowances paid before July 1, or reimbursements relating to earlier travel, remain subject to the original 2026 rates.
Businesses, self-employed individuals, and other eligible taxpayers should review their mileage logs and reimbursement procedures to ensure travel dates, mileage, and business purposes are properly documented. The standard mileage rate is optional, and taxpayers may instead calculate eligible vehicle deductions using actual expenses when appropriate.
Should you have questions about how the revised mileage rates affect your deductions or employee reimbursement policies, please call us at (401) 921-2000 or contact us here.