IRS Raises 2026 Business Mileage Rate to 76 Cents, Effective July 1

If your business reimburses mileage or deducts vehicle expenses, the IRS made a mid-year change you'll want to account for now.

The IRS announced that the standard mileage rate for business use increased to 76 cents per mile, effective July 1, 2026, a 3.5 cent jump from the 72.5 cent rate that was in effect for the first half of the year. This rare mid-year adjustment, issued in response to rising fuel prices, modifies Notice 2026-10 and can meaningfully impact reimbursements, deductions, and budgeting for businesses with frequent vehicle use.

The Revised 2026 Standard Mileage Rates at a Glance

Effective July 1, 2026, the optional standard mileage rates are:

• 76 cents per mile for business use (up 3.5 cents from the 72.5-cent rate in effect since January 1, 2026).
• 23.5 cents per mile for medical purposes (up 3 cents from 20.5 cents).
• 23.5 cents per mile for qualifying moving expenses for certain active-duty military members and eligible intelligence community employees (up 3 cents from 20.5 cents).
• 14 cents per mile for charitable use (unchanged).

These rates apply equally to gasoline, diesel, hybrid, and fully electric vehicles.

Because the change falls mid-year, expenses paid or incurred and mileage allowances paid to employees before July 1, 2026 still use the original rates from Notice 2026-10 (72.5 / 20.5 / 14 cents). Amounts paid or incurred on or after July 1, 2026 use the new rates, so make sure your mileage logs and reimbursements reflect the correct split.

The Bottom Line

Mileage rates are a small line item with an outsized planning impact. This mid-year increase is a good reminder to revisit:

• Your reimbursement policies.
• How owners and key employees track business mileage.
• Whether your current deduction method still makes sense.

At Redpath, we stay ahead of these changes so you don't have to, and we help you apply them in a way that supports smarter tax outcomes, not just compliance.