2026 IRS Mileage Rate: 72.5¢, Then 76¢ From July 1

Why the IRS changed the rate mid-year

The business rate is based on the fixed and variable costs of running a car. The medical and moving rate uses only variable costs such as fuel. When fuel costs rise sharply, the IRS can issue a mid-year update, as it did in July 2022. The July 2026 increase is the second mid-year change in five years.

Mid-year changes only affect miles driven after the effective date. Trips from the first half of 2026 keep the 72.5¢ rate; you do not recalculate them.

How to calculate a 2026 deduction with two rates

Total your business miles for January 1 to June 30 and multiply by $0.725. Total your business miles from July 1 onward and multiply by $0.76. Add the two results. Example: 6,000 miles before July 1 = $4,350, plus 7,000 miles after = $5,320, for a total deduction of $9,670.

Medical miles work the same way at 20.5¢ and 23.5¢. Charity miles are 14¢ for the whole year.

For employer reimbursements at the IRS rate, Announcement 2026-11 applies 76¢ to travel on or after July 1, 2026; earlier trips keep 72.5¢ even when they are paid later. The mileage reimbursement calculator splits a list of trips at that date and also takes an employer's own rate. Reimbursements up to the IRS rate are generally tax-free under an accountable plan.