IRS Finally Releases 2026 Standard Mileage Rates (IR-2025-128, Dec. 29, 2025)

Sharon Kreider, CPA

The IRS has released the 2026 standard mileage rates. While not a 2025 return preparation concern, these rates matter immediately for employee mileage reimbursement programs that rely on the federal standard mileage rate, particularly accountable plans that update automatically based on IRS guidance.

Why the 2026 Rates Matter Now

Many employers reimburse employee business mileage under accountable plans that reference the IRS standard mileage rate as a safe harbor. Once the IRS releases a new rate, employers that tie reimbursements to the federal rate must update systems effective January 1, 2026.

Key implications:

Reimbursements at or below the IRS rate remain nontaxable when substantiation requirements are met
Amounts reimbursed above the IRS rate convert to taxable wages unless the employer substantiates actual expenses
Payroll and expense platforms often require manual confirmation that the new rate applies to 2026 mileage

Comparison Chart: 2025 vs 2026 IRS Standard Mileage Rates

Rate Category	2025 Standard Mileage Rate	2026 Standard Mileage Rate	Practical Impact
Business use	70.0 cents per mile	72.5 cents per mile	Employers use the higher rate for miles driven on or after January 1, 2026 under accountable plans tied to the federal rate.
Medical purposes	21.0 cents per mile	20.5 cents per mile	Applies to deductible medical mileage under IRC §213. Slight decrease.
Moving purposes for active-duty military	21.0 cents per mile	20.5 cents per mile	Applies only to qualifying active-duty military moves under IRC §217.
Charitable purposes	14.0 cents per mile	14.0 cents per mile	Statutory rate set by Congress. Unchanged.

Accountable Plans and Policy Language

Clients should review whether client reimbursement policies reference:

A specific mileage rate, which requires annual amendments
The IRS standard mileage rate in effect when the mileage is incurred, which updates automatically

Plans that hard-code a dollar amount often drift out of compliance when the IRS updates the rate.

Interaction With Unreimbursed Employee Expenses

The suspension of miscellaneous itemized deductions continues to eliminate federal deductions for unreimbursed employee business mileage. As a result:

Employer reimbursement design now carries greater economic importance for employees
Timely adoption of the 2026 rate helps employers avoid employee dissatisfaction while preserving payroll tax compliance

Bottom Line

The release of the 2026 standard mileage rates functions as an operational trigger, not a filing-season change. Tax professionals add value by ensuring clients apply the correct rate to the correct year and avoid turning otherwise nontaxable reimbursements into taxable compensation.

For more on this topic, be sure to check out IR-2025-128, Dec. 29, 2025.