IRS Announces Increase in Mileage Rates for Remainder of 2026
In mid-July, the IRS made a rare announcement that they would setting a higher optional standard mileage rate, used to calculate the deductible costs of operating a vehicle for certain purposes, for the remainder of 2026. The IRS identified an increase in fuel costs as the driving factor. The American Automobile Association (AAA) observed that the average price for a gallon of gas on January 8, 2026 was $2.819 a gallon, and it had risen to $3.890 a gallon on July 15, an increase of 38%.
Announcement 2026-11 revises the previous Notice 2026-10 and changes the optional standard mileage rates used for computing the deductible costs of operating a vehicle for business, medical, or moving purposes and also for determining the reimbursed amount of these expenses that is deemed substantiated.
Effective July 1, 2026, the newly revised standard mileage rates for vehicles (including cars, vans, pickups, and panel trucks) will be:
- 76 cents per mile driven for business use (previously 72.5 cents)
- 5 cents per mile for medical purposes (previously 20.5 cents)
- 5 cents per mile for moving purposes, for certain qualified active-duty members of the Armed Forces and members of the intelligence community (previously 20.5 cents)
These rates will apply to electric, hybrid-electric, gasoline, and diesel-powered vehicles. The mileage rate for charitable use is set by statute and therefore remains unchanged from 14 cents per mile driven in service of charitable organizations. Additionally, these rates will only apply to eligible transportation expenses incurred on or after July 1, 2026. The original rates will apply to mileage incurred between January 1 and June 30, 2026, so taxpayers should keep good records and make note of this distinction when preparing their taxes next year
All other provisions of the previous Notice 2026-10 will remain in effect. The last time a mid-year adjustment was made to the mileage rates was back in 2022.
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