The IRS has announced a midyear increase to the standard mileage rate due to rising fuel costs. Effective July 1 through December 31, 2026, the business mileage reimbursement rate increased from 72.5 cents to 76 cents per mile. This rate determines the amount employers can reimburse employees for business travel on a tax-free basis.
The IRS also raised the mileage rate for medical travel and eligible moving expenses for active-duty military personnel and certain intelligence community members. These rates increased from 20.5 cents to 23.5 cents per mile beginning July 1, 2026.
The charitable mileage rate remains unchanged at 14 cents per mile, as it is set by federal statute and cannot be adjusted administratively by the IRS.
These rate increases come in response to volatile fuel prices, which have risen significantly in recent months. Higher gas prices have created additional financial pressure for employees, prompting the IRS to make the unusual mid-year adjustment to better reflect current driving costs.