IRS Announcement 2026-11, 2026-29 I.R.B. 49
Available at https://www.irs.gov/pub/irs-irbs/irb26-29.pdf
The IRS has announced a midyear increase in the standard mileage rates for business and medical use of an automobile, and for deducting moving expenses. For travel on or after July 1, 2026, the business standard mileage rate is 76 cents per mile (up from the original 2026 rate of 72.5 cents per mile). The rate when an automobile is used to obtain medical care—which may be deductible under Code § 213 if it is primarily for, and essential to, the medical care—is 23.5 cents per mile for travel on or after July 1, 2026 (up from 20.5 cents per mile). The rate for deducting automobile expenses that are moving expenses under Code § 217 also increases from 20.5 to 23.5 cents per mile for travel on or after July 1, 2026. Note, however, that the moving expense deduction is available only for certain moves by members of the Armed Forces on active duty and members of the intelligence community). The rate for charitable use of an automobile remains unchanged at 14 cents per mile.
Standard mileage rates can be used instead of calculating the actual expenses that are deductible. For example, the business standard mileage rate can be used instead of determining the amount of fixed expenses (e.g., depreciation, lease payments, and license and registration fees) and variable expenses (e.g., gas and oil) that are deductible as business expenses. Only variable expenses are deductible as medical or moving expenses, so the medical and moving rate is lower. (Parking fees and tolls related to use of an automobile for medical or moving expense purposes may be deductible as separate items.) These and other details about using the standard mileage rate can be found in Revenue Procedure 2019-46.
EBIA Comment: Ordinarily, the IRS updates mileage rates only once a year, but occasionally it makes interim adjustments like this one, which reflects recent increases in the price of fuel. Transportation expenses that are deductible medical expenses under Code § 213 generally can be reimbursed on a tax-free basis by a health FSA, HRA, or HSA. (To simplify administration, some employers’ health FSAs or HRAs exclude medical transportation expenses from the list of reimbursable items.) The applicable reimbursement rate is the one in effect when the expense was incurred. For more information, see EBIA’s Cafeteria Plans manual at Sections XX.L.8.b (“Mileage Rate for Traveling to Obtain Medical Care”) and XX.M (“Table of Common Expenses, Showing Whether They Are for ‘Medical Care’”). See also EBIA’s Consumer-Driven Health Care manual at Sections XV.C (“What Is an HSA-Qualified Medical Expense?”) and XXIV.B (“HRAs May Reimburse Only Code § 213(d) Expenses”), and EBIA’s Fringe Benefits manual at Sections IV.F (“Employer Reimbursements for Business Use of an Employee’s Car”) and XVII.D.1.b (“Types of Expenses: Travel by Car”).
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