Wednesday, August 5, 2026
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Federal Compliance Update
Highlights:
Impacted Employers: All employers
Effective Date: July 1, 2026
Summary: On July 13, 2026, the Internal Revenue Service (IRS) increased the reimbursement rate for the use of an automobile for business purposes as well as the medical mileage reimbursement rate.
Next Steps: Employers may use the increased rates for expenses incurred on or after July 1, 2026.
The Details
On Dec. 29, 2025, the Internal Revenue Service, via Notice 2026-10, issued the 2026 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, moving, and charitable purposes.
As of January 1, 2026, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) were:
- 72.5 cents per mile for business miles driven
- 20.5 cents per mile driven for medical and moving purposes*
- 14 cents per mile driven in service to a charitable organization
*Applicable to members of the Armed Forces and Intelligence Community only.
The rates listed above were in effect from Jan. 1 through June 30, 2026.
Mid-Year Increase:
On July 13, 2026, the Internal Revenue Service issued via IRB 2026-29 (see page 49) a mid-year increase to the 2026 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, moving, and medical purposes.
As of July 1, 2026, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are:
- 76.0 cents per mile for business miles driven
- 23.5 cents per mile driven for medical and moving purposes*
- 14 cents per mile driven in service to a charitable organization**
*Applicable to members of the Armed Forces and Intelligence Community only.
** The rate for reimbursement of miles driven in service to a charitable organization is set by statute and will remain at 14 cents for all of 2026.