The IRS standard mileage rate for business driving in 2026 is 72.5 cents a mile from January 1 to June 30 and 76 cents a mile from July 1 to December 31. The medical and military moving rate rose from 20.5 cents to 23.5 cents on the same date. Charity stays at 14 cents.
In brief: the date you drove sets the rate, not the date you are paid. Miles through June 30 use the old rate and miles from July 1 the new one, so a report spanning the change needs both. Employers may pay less than the IRS rate; tax-free reimbursement stops at it.
What is the IRS mileage rate for 2026?
The IRS publishes four standard mileage rates: business, medical, moving and charity. For 2026 it set them twice, once for the first half of the year and again from July 1. These are the rates for cars, vans, pickups and panel trucks, whether gas, diesel, hybrid or electric.
| Purpose | Jan. 1 to June 30, 2026 | July 1 to Dec. 31, 2026 |
|---|---|---|
| Business (employees and self-employed) | 72.5 cents | 76 cents |
| Medical | 20.5 cents | 23.5 cents |
| Moving (military only) | 20.5 cents | 23.5 cents |
| Charity | 14 cents | 14 cents |
The moving rate is only for members of the Armed Forces, and certain members of the intelligence community, who move under orders. It always equals the medical rate (IRS Topic 455). The charity rate is fixed by law at 14 cents a mile, so it did not change (26 U.S.C. 170(i)).
What changed on July 1, 2026?
In July the IRS raised the business rate from 72.5 cents to 76 cents a mile and the medical and moving rate from 20.5 cents to 23.5 cents, effective July 1 (Internal Revenue Bulletin 2026-29). The first-half rates were set by Notice 2026-10.
The new rates apply to expenses paid or incurred on or after July 1, 2026, and to mileage allowances paid to an employee on or after that date for driving done from that date. Miles driven before July 1 keep the first-half rates, even if they are reported or reimbursed later.
For comparison, the business rate for all of 2025 was 70 cents a mile, so the second-half rate is the highest the IRS has set (IRS standard mileage rates, all years).
Which rate do I use for miles driven before and after July 1?
Use the rate for the date of each trip. A June trip gets the first-half rate even if the expense report is filed in July, and a July trip gets the new rate even if the report period started in June. A monthly log keeps this simple.
Here is how that works on a real report. This sales trip from our sample expense report starts on June 29 and ends on July 3, so the first leg uses the old rate and the last two use the new one. Our expense report template applies the right rate to each date automatically.
| Date | Trip | Miles | Rate | Amount |
|---|---|---|---|---|
| June 29 | Columbus office to Dayton client | 72 | 72.5 cents | $52.20 |
| July 2 | Dayton to Cincinnati client site | 54 | 76 cents | $41.04 |
| July 3 | Cincinnati back to Columbus office | 107 | 76 cents | $81.32 |
| Total | 233 | $174.56 | ||
| The same 233 miles all at the January rate of 72.5 cents | $168.93 | |||
Pricing every mile at the January rate would underpay the employee for the July trips. Pricing every mile at the July rate would overpay the June leg, and that overpayment would count as taxable wages.
Has the IRS changed the mileage rate mid-year before?
Rarely. Before 2026, the IRS last raised the rate in the middle of a year in 2022, and before that in 2011, both times effective July 1. In every other year since then one set of rates covered the whole year.
Because mid-year changes are rare, many payroll and expense systems set one rate per calendar year. If yours does, check that it was updated on July 1 and that June trips entered late were not priced at the new rate.
How mileage reimbursement works for employees
An employer that reimburses mileage under an accountable plan does not treat the payment as wages, so no income tax, Social Security or Medicare is withheld. To qualify, employees must report their business miles within a reasonable time and return any advance they did not use (IRS Publication 15).
The IRS treats it as reasonable if employees account for expenses within 60 days and return any excess within 120 days after the expense. Reimbursement paid without a mileage record is treated as paid under a nonaccountable plan and is taxable wages.
The IRS rate is a limit on tax-free reimbursement, not a rate employers must pay. If an allowance is higher than the federal rate, the excess goes in box 1 as wages, and the part up to the federal rate is reported under code L in W-2 box 12 (IRS Publication 463).
Federal tax law does not require employers to reimburse mileage at all. Some states do: California requires employers to repay employees for necessary expenses of the job, which includes using a personal car for work (California Labor Code 2802). Check your state’s rules before you set a lower rate.
Deducting mileage if you are self-employed
Self-employed people can deduct business driving using either the standard mileage rate or their actual car costs, such as gas, repairs, insurance and depreciation. The standard rate replaces those actual costs, so you cannot claim both. Parking fees and tolls for business trips are deductible on top of either method (IRS Topic 510).
To use the standard rate for a car you own, you must choose it in the first year the car is used in your business. You cannot use it if you run five or more cars at the same time, as in a fleet. Most employees cannot deduct unreimbursed car expenses at all.
What records do I need for mileage?
For each business trip, keep the date, where you went, the business purpose and the miles driven, written down at or near the time of the trip. A log kept as you go beats one rebuilt at tax time. Commuting between home and a regular workplace is personal driving and does not count.
Keep receipts for parking and tolls too. The IRS does not require a receipt for most business expenses under $75, other than lodging, but you still need a record of the amount, date, place and purpose. Keep the log and receipts for at least 3 years after you file.
