IRS Standard Mileage Rate for Business Use Rises to 76 Cents Per Mile on July 1, 2026

The Internal Revenue Service raised its optional mileage rate for business use to 76 cents per mile for travel on or after July 1, 2026. Business miles driven from January 1 through June 30 continue to use the 72.5-cent rate.

The change applies to the final six months of tax year 2026. It does not alter the rate for earlier trips.

Drivers must split their records by date. A single annual rate cannot cover both periods.

The revised IRS standard mileage rate covers qualifying automobile operating costs and may be used to substantiate transportation expenses paid or incurred on or after the effective date. That includes certain mileage allowances paid to employees and qualifying employee travel expenses.

A 1,000-mile business trip taken after the change produces a $760 calculation under the standard rate. The same distance at 72.5 cents per mile produces $725.

The agency published the revised schedule in Internal Revenue Bulletin 2026-29 on July 13, 2026. The bulletin makes the new rates effective beginning July 1.

IRS Announcement 2026-11 modified the original 2026 guidance in Notice 2026-10. The rates remain optional standards for substantiating automobile operating costs.

The second half of 2026 has four mileage rates

The new business rate is not the only midyear adjustment. Medical and moving mileage also increase, while charitable driving keeps its statutory rate.

Medical travel rises to 23.5 cents per mile for trips beginning July 1. The same figure applies to eligible moving expenses during the second half of the year.

The moving rate covers eligible active-duty military members and certain intelligence community members. The applicable moving rules remain narrower than the general business category.

Charitable mileage stays at 14 cents per mile throughout 2026. Section 170(i) fixes that amount by federal statute, so the IRS cannot adjust it through the midyear announcement.

All three revised categories, business, medical and moving, run through December 31, 2026. The effective date controls which rate belongs in the records.

Employers must separate pre-July and post-June trips

A person tracking business travel should record the date and purpose of every trip. Mileage totals alone do not show which rate applies.

A driver who logs 10,000 business miles during the second half of 2026 can calculate $7,600 under the new business rate. At the original 72.5-cent rate, those miles would equal $7,250.

Employers using the standard rate for reimbursements must update payroll and expense systems to distinguish miles driven before and after July 1. The revised amount applies to transportation expenses paid or incurred on or after that date.

The adjustment also reaches mileage allowances paid to employees and qualifying employee travel expenses. Employers therefore need records that connect the payment or expense to the relevant travel period.

The standard mileage method is optional. A taxpayer using it generally applies the prescribed amount to qualifying miles instead of calculating each actual automobile operating cost.

Self-employed individuals and workers who qualify for reimbursement arrangements stand to see higher amounts for eligible later-year business mileage. Reimbursement treatment and federal deduction treatment remain separate tax questions.

Fuel costs prompted an uncommon midyear revision

The IRS cited rising fuel costs in 2026 when it revised the rates. The agency has changed its mileage figures outside the regular annual cycle only five times since 2005.

“The Internal Revenue Service is revising the optional standard mileage rates for substantiating the costs of operating an automobile for business, medical or moving purposes. to reflect the rising cost of fuel in 2026”

AAA data showed regular gasoline rising from $2.819 per gallon on Jan. 8 to $3.890 on July 15, 2026. The increase amounted to 38%.

Analysts also attributed the fuel spike to renewed military conflicts in the Middle East. One cited factor was the “Iran war.”

The national average reached $3.85 per gallon by mid-July. Fuel prices formed the backdrop for the IRS’s off-cycle adjustment.

Phong Nguyen, CEO of Motus, said employees experience those cost changes directly when they drive for work.

“Employees who drive for work feel the effects of changing fuel prices every time they fill up their tank. A mid-year rate adjustment recognizes the changing costs that organizations and employees are facing”

The revised schedule changes the amount assigned to later mileage. It does not merge the first six months and the final six months into one annual rate.

A 2025 law expanded eligibility for some moving expenses

The One, Big, Beautiful Bill Act, enacted July 4, 2025, as P.L. 119-21, expanded the moving expense deduction to include certain intelligence community members alongside active-duty military personnel.

That provision explains why the moving category names both groups. It does not make every relocation deductible.

Eligible active-duty military members and qualifying intelligence community members may use the 23.5-cent moving rate for covered travel beginning July 1. The rate for eligible moving mileage before that date remains 20.5 cents per mile.

Medical travel uses the same 23.5-cent rate after the effective date. Its first-half miles remain subject to the earlier medical rate.

The higher rate does not restore every employee deduction

The same 2025 law made permanent the disallowance of miscellaneous itemized deductions for unreimbursed employee travel expenses. A worker can receive a revised mileage allowance through an eligible reimbursement arrangement without automatically qualifying for a federal itemized deduction for unreimbursed travel.

The midyear announcement changes the mileage calculation. It does not change every rule governing who may claim a deduction.

Taxpayers with mixed travel should keep records showing the date, destination, purpose and mileage for each qualifying trip. Business, medical, moving and charitable travel use different rates, and moving mileage remains limited to eligible taxpayers and expenses.

The revised business, medical and moving rates apply from July 1 through December 31, 2026. Charitable driving remains 14 cents per mile for the entire year.

This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.