If you use the standard mileage rate to deduct business travel or reimburse employees for driving, there's an important update you don't want to overlook. In a move that's uncommon for the agency, the IRS has announced new standard mileage rates that took effect on July 1, 2026, increasing the rates for business, medical, and certain moving expenses. Because the change occurred halfway through the year, taxpayers and employers alike may need to apply two different mileage rates depending on when travel occurred, making accurate recordkeeping more important than ever.
What is changing?
In Announcement 2026-11, the IRS has announced that starting July 1, 2026, the revised standard mileage rates are:
- Business: 76 cents per mile (up from 72.5 cents per mile)
- Medical and moving: 23.5 cents per mile (up from 20.5 cents per mile)
The mileage rate that applies to the deduction for charitable contributions is fixed under § 170(i) of the Internal Revenue Code at 14 cents per mile and is not changed. This announcement changes the rates published in Notice 2026-10, which took effect at the beginning of the year.
It is very rare for the IRS to make a mid-year change like this. The revised standard mileage rates set forth in this announcement apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes on or after July 1, 2026, and to mileage allowances that are paid both (1) to an employee on or after July 1, 2026, and (2) for transportation expenses paid or incurred by the employee on or after July 1, 2026.
What about the previous notice?
The standard mileage rates set forth in Notice 2026-10 continue to apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes before July 1, 2026, and to mileage allowances paid (1) to an employee before July 1, 2026, or (2) with respect to transportation expenses paid or incurred by the employee before July 1, 2026.
This can create a bit of confusion, as the new announcement does not entirely override the earlier Notice 2026-10. The IRS emphasizes that all other provisions of Notice 2026-10 remain in effect.
Have questions?
To ensure your small business is following all applicable rules, please work with your tax professional. If you have questions, our Business Tax and Advisory team is here to help. Contact us to learn more.
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