The 2026 IRS Mileage Rate Changed Mid-Year: 72.5¢, Then 76¢

The IRS set the 2026 business standard mileage rate at 72.5 cents a mile in December 2025. Then, with fuel prices up sharply over the first half of the year, it did something it rarely does: in Announcement 2026-11, published in July, it raised the rate to 76 cents a mile for miles driven from 1 July 2026 to 31 December 2026.

The 2026 rates

• Business: 72.5¢ a mile from 1 January to 30 June 2026, and 76¢ a mile from 1 July to 31 December 2026.
• Medical and qualifying moving: 20.5¢, then 23.5¢ from 1 July.
• Charitable: 14¢ all year, fixed by law.

What it means for your deduction

You can't apply one rate to the whole year. Split your business miles by date and use the rate for each half. Parking and tolls for business trips are deductible on top.

Applying 72.5¢ to all 8,000 miles would give $5,800 plus parking, understating the deduction by $140. For someone whose driving is concentrated in the second half, the gap is bigger: 10,000 miles all after July are worth $7,600 at 76¢, against $7,250 at the old rate.

Your mileage log matters more this year

Because the rate depends on the date, a log with a date for every trip is what lets you use the higher rate for later miles. For each business trip, record the date, destination, business purpose and miles, and note your total miles for the year. Mileage-tracking apps do this automatically.

Employers reimbursing mileage

Employers who reimburse at the IRS rate should have moved to 76¢ for miles from 1 July. Reimbursements above the applicable rate are taxable to the employee. Some states, including California, require employers to reimburse necessary business expenses, so check that your payroll system updated in July.

Details from the announcement

• The change was published in Announcement 2026-11 in Internal Revenue Bulletin 2026-29, and it modifies the rates set in Notice 2026-10 last December.
• The IRS said the change results from recent fuel price increases, but the rate applies to all vehicles, including electric and hybrid cars, not only petrol and diesel ones.
• The higher rate is not retroactive: miles driven from 1 January to 30 June 2026 stay at 72.5 cents.
• For employer mileage allowances, the new rate applies to allowances paid on or after 1 July for expenses incurred on or after that date.
• The charitable rate is fixed by law at 14 cents and did not change.

The IRS changes the rate in the middle of a year only rarely, so many expense systems were not built for two rates in one year. If you reimburse staff or track your own deduction in software, check that it applies the rate according to the trip date, not the date the claim is submitted.

Tip: If you use the standard mileage rate, you generally need to choose it in the first year you use a car for business. After that you can switch between it and actual expenses only in some cases.