2026 IRS Mileage Rates — Mid-Year Split 72.5¢ Then 76¢
Announcement 2026-11 raised the business mileage rate to 76 cents from July 1, 2026. Use 72.5¢ for H1 miles and 76¢ for H2. Medical/moving 20.5¢ then 23.5¢. Charity stays 14¢.
By Greg, Editor at Finance Maxx. Published · Updated
2026 has two IRS standard mileage rates for business, medical, and moving miles. If you log every mile at one rate, you will misstate the deduction or the accountable-plan reimbursement.
This guide is the logbook version: the H1 and H2 rates from Notice 2026-10 and Announcement 2026-11 (Internal Revenue Bulletin 2026-29, July 13, 2026), who can still use them, and a worked split-year sketch. Confirm the current IRS standard mileage rates page before you file or set reimbursements.
What changed mid-year
In late December 2025 the IRS set the optional 2026 business rate at 72.5 cents per mile (up 2.5 cents from 2025), with medical and qualifying moving miles at 20.5 cents, and charity at 14 cents. That package is Notice 2026-10.
Fuel costs moved enough that the agency revised the optional rates again. Announcement 2026-11 modifies Notice 2026-10 effective July 1, 2026:
| Purpose | Jan 1 – Jun 30, 2026 | Jul 1 – Dec 31, 2026 |
|---|---|---|
| Business / self-employed | 72.5¢ | 76¢ |
| Medical | 20.5¢ | 23.5¢ |
| Moving (limited military / intelligence) | 20.5¢ | 23.5¢ |
| Charitable | 14¢ | 14¢ |
The July 1 line is about when the miles were driven (or when the deductible transportation expense was paid or incurred), not when you file the return. For employer mileage allowances, Announcement 2026-11 also ties the higher rate to allowances paid on or after July 1 for expenses incurred on or after July 1 — both timing tests matter for reimbursements.
Who these rates are for
Optional standard mileage rates are a substantiation shortcut for the deductible cost of operating a car, van, pickup, or panel truck. They apply to gasoline, diesel, hybrid, and fully electric vehicles.
Typical users:
- Self-employed filers deducting business miles on Schedule C (or the vehicle portion of other business returns)
- Employers reimbursing employees under an accountable plan at or below the IRS rate
- Taxpayers with deductible medical travel, within the rules in Publication 502 / Publication 463
- Certain active-duty Armed Forces members (and certain intelligence-community members under OBBBA) claiming moving miles
They are not a free pass for ordinary W-2 commuting. Unreimbursed employee miscellaneous itemized deductions subject to the 2%-of-AGI floor remain broadly disallowed. Narrow exceptions still exist (for example some reservists, fee-basis officials, performing artists, and certain educator expenses). Read the current IRS page before you assume a W-2 commute is deductible.
How to apply the split without breaking the log
- Keep a contemporaneous log: date, business purpose, miles, and starting/ending odometer (or a reliable app export).
- Split the year at July 1, 2026. Sum H1 business miles × 0.725. Sum H2 business miles × 0.76.
- Do the same split for medical or qualifying moving miles at 0.205 / 0.235.
- Charity miles stay at 0.14 all year — no mid-year change.
- If you use actual expenses instead of the standard rate, you are outside this table. Switching methods has its own first-year and lease rules under Notice 2026-10; the mid-year announcement did not rewrite those.
Employers: update accountable-plan tables for miles driven on or after July 1, and for allowances paid on or after that date for those later miles. Paying the H2 rate for H1 miles (or the reverse) creates over- or under-substantiation noise you do not need.
Worked sketch (business miles only)
Stated assumptions: 4,200 business miles Jan–Jun; 5,100 business miles Jul–Dec; self-employed; standard mileage method; no actual-expense election; 24% federal marginal rate for a planning shortcut only.
- H1 deduction: 4,200 × $0.725 = $3,045
- H2 deduction: 5,100 × $0.76 = $3,876
- Combined mileage deduction: $6,921
- Rough federal income-tax effect at 24%: about $1,661
If you had wrongly applied 72.5¢ to the whole year, the combined figure would be about $6,742 — $179 low. If you had applied 76¢ to the whole year, you would be about $147 high. The split matters more when H1 and H2 mile counts diverge.
Self-employment tax, state tax, depreciation recapture if you later switch methods, and basis adjustments are outside this sketch. Use the federal tax calculator only as a bracket-context check after you have the correct mileage total — the calculator does not log miles for you.
Reimbursements vs deductions
- Accountable plan reimbursement at or below the applicable IRS rate is generally excluded from the employee’s wages when substantiation rules are met.
- Above the IRS rate, or a non-accountable arrangement, can create taxable wages.
- Self-employed deduction uses the same cents-per-mile figures but lands on the business return, not a W-2 reimbursement line.
Announcement 2026-11 is explicit that Notice 2026-10 rates still govern pre–July 1 expenses and allowances, and that all other Notice 2026-10 provisions remain in effect.
What this does not do
- It does not announce 2027 rates. Those usually arrive in a December notice.
- It does not restore a broad unreimbursed employee mileage deduction for most W-2 workers.
- It does not replace Publication 463, Form 2106 (where still allowed), or Schedule C instructions.
- It does not decide whether standard mileage or actual expenses is better for your facts.
- Charitable 14¢ is statutory; do not “update” it when business rates move.
- Educational only — not tax, payroll, or legal advice.
Related reading
- How federal tax brackets work — context for the planning shortcut above
- 2026-2027 special per diem rates — another travel substantiation table that changed for late 2026
- Car loan interest deduction — separate personal-interest rule for qualifying new-car loans; not a substitute for business mileage
- Itemize or take the standard deduction — why most employees cannot itemize unreimbursed miles
FAQ
What is the 2026 IRS business mileage rate?
Two rates. 72.5 cents per mile for business miles before July 1, 2026, and 76 cents per mile for business miles on or after July 1, 2026.
Why did the rate change in July?
Announcement 2026-11 cites recent increases in fuel prices. The revision modifies Notice 2026-10 only for the cents-per-mile figures and their effective dates.
What about medical and moving miles?
20.5 cents before July 1; 23.5 cents on or after July 1. Moving mileage remains limited to qualifying military and certain intelligence-community relocations.
Is charity still 14 cents?
Yes, for the full calendar year. IRC section 170(i) fixes that rate.
Can I use one blended rate for 2026?
No. The IRS published period-specific rates. Blend only if you intentionally average after applying each period correctly — and expect preparers and auditors to want the split.
Try it yourself
- Export or rebuild your 2026 mileage log with a July 1 cut.
- Multiply H1 and H2 business miles by 0.725 and 0.76.
- Employers: confirm accountable-plan rates match Announcement 2026-11 timing for both payment date and expense date.
- For a rough federal tax effect of a self-employed mileage total, open the federal tax calculator with and without that deduction amount as a planning shortcut.
- Re-check IRS standard mileage rates when 2027 figures post.