The IRS announced that the business standard mileage rate for transportation expenses paid or incurred beginning January 1, 2026, will be 72.5 cents per mile, up 2.5 cents from 70 cents per mile for 2025 [Notice 2026-10, 12-29-25].
The mileage rate may be used to compute the amount to reimburse employees who are using their own cars for business purposes. It may also be used by employers that elect to use the “cents-per-mile” valuation method for purposes of determining the amount that needs to be imputed to an employee’s income for personal use of certain company-owned or leased nonluxury vehicles. However, it may not be used by employees in claiming a tax deduction for unreimbursed employee business expenses.
For vehicles put into service in 2026, the cents-per-mile valuation method and the fleet-average valuation rule can be used only if the vehicle does not have a fair market value of more than $61,700 ($61,200 in 2025).
Other standard mileage rates
In addition to the business standard mileage rate, there are other mileage rates that may be used to calculate the deductible costs of operating vehicles for charitable, medical, and certain moving costs related to the military or intelligence community.
Beginning on January 1, 2026, those rates will be:
- 20.5 cents per mile for medical purposes, down 0.5 cents from 2025
- 20.5 cents per mile for moving purposes for certain members of the Armed Forces on active duty and certain members of the intelligence community, down 0.5 cents from 2025
- 14 cents per mile driven in service of charitable organizations, unchanged from the rate in 2025 (this rate is set by law and is not subject to annual adjustments)
Employers should make sure they change to the 2026 rate for all affected travel on or after January 1, 2026.
Questions? Visit with one of our payroll or tax experts at (888) 388-1040.
