IRS Raises 2026 Standard Mileage Rates Mid-Year Amid Rising Fuel Costs

The Internal Revenue Service issued Announcement 2026-11, published in the Internal Revenue Bulletin on Monday, to modify the optional standard mileage rates for the remainder of 2026. The revision, the first mid-year change since 2022, takes effect on July 1, 2026.

IRS quietly raises mileage rates due to inflation

The IRS attributed the adjustment to “inflation” and recent increases in the price of fuel. The American Automobile Association reported that the average price of regular gasoline rose from $2.819 per gallon on Jan. 8 to $3.890 per gallon on July 15, a 38 % increase. By mid-July, the average price was $3.943 per gallon, up from $3.890 a week earlier and $3.846 the week before, with recent spikes linked to intensified fighting between the United States and Iran over the Strait of Hormuz.

Rising Fuel Costs Prompt the IRS to Raise Standard Mileage Rates for Rest of 2026

• Business mileage: 76 cents per mile (up from 72.5 cents).

Rising Fuel Costs Prompt the IRS to Raise Standard Mileage Rates for Rest of 2026

• Medical and moving mileage: 23.5 cents per mile (up from 20.5 cents).

Rising Fuel Costs Prompt the IRS to Raise Standard Mileage Rates for Rest of 2026

• Charitable mileage: Fixed at 14 cents per mile under §170(i) of the Internal Revenue Code.

IRS raises standard mileage rates for remainder of 2026

All other provisions of Notice 2026-10 remain unchanged. The revised rates apply to deductible transportation expenses paid or incurred on or after July 1, 2026, and to mileage allowances paid to employees for expenses incurred on or after that date.

IRS quietly raises mileage rates due to inflationRising Fuel Costs Prompt the IRS to Raise Standard Mileage Rates for Rest of 2026

Expenses incurred before July 1, 2026, continue to be calculated using the original 2026 rates of 72.5 cents for business and 20.5 cents for medical/moving purposes, as set out in Notice 2026-10. Mileage allowances paid before the effective date are also governed by the earlier rates.

IRS quietly raises mileage rates due to inflationRising Fuel Costs Prompt the IRS to Raise Standard Mileage Rates for Rest of 2026

Accountants and employers must apply the higher rates when preparing 2026 tax returns or reimbursing employees for business, medical, or moving travel occurring after July 1. The increase aligns deductible amounts with current fuel costs, potentially reducing out-of-pocket expenses for taxpayers who rely on vehicle travel for qualifying purposes.

IRS quietly raises mileage rates due to inflation