IRS raises standard mileage rate to 72.5 cents for 2026

The IRS just released its standard mileage rates for 2026. There was a 2.5 cent increase from 2025 for the standard business rate, while medical rates fell slightly

Every year, the IRS publishes… New standard mileage rates In December notice of the new year. There are separate mileage rates for operating a vehicle for business, charitable, medical or moving purposes.

For 2026, the IRS’s mileage rates have changed across the board, where legally permitted. The business mileage rate is the highest ever.

This will impact many areas, including employer reimbursement rates, the cost of attending college, and more.

Here’s what to know about the new 2026 IRS standard mileage rates.

IRS mileage rates for 2026

The new IRS mileage rates for 2026 are 72.5 cents per mile for business purposes (up from 70 cents per mile in 2025), 20.5 cents per mile for medical or moving purposes and 14 cents per mile for charitable purposes.

New mileage rates for business and medical/transportation purposes are set annually by the IRS based on the cost of gasoline, changes in fuel economy and insurance.

The rate for charitable purposes is determined by law and does not change. [26 USC 170(i)]

You cannot deduct personal use of the vehicle.

You can deduct the actual cost of business miles instead of the mileage rate if you document the expense. The cost may be higher if you drive a low-mileage vehicle and/or a vehicle with higher insurance costs.

What is included in the IRS mileage rate?

IRS mileage rates are the same for all types of vehicles, including internal combustion engine (ICE), hybrid and electric (EV) vehicles. Mileage rates are the same for cars, vans, minivans and small delivery vans.

This benefits drivers of electric vehicles and hybrid vehicles, since the “fuel” cost of an electric vehicle is lower than the fuel cost of a hybrid or ICE vehicle, and hybrids get better mileage than ICE vehicles.

The mileage rate includes all additional costs of operating the vehicle. This includes the cost of gas, maintenance (including oil and tires), and repairs. It also includes the cost of insurance, registration fees, lease payments, and depreciation. It does not include the cost of parking and toll fees.

Mileage rates are the same across the country.

Payment rates for employees

There is no obligation for a company to use mileage rates set by the IRS to compensate employees for business travel by car. But most companies use the IRS’ mileage rates.

As a result, many employees will see higher reimbursement rates next year.

Cost of attendance at college

The cost of attending college includes a transportation allowance which is supposed to cover the cost of travel between home, school and work.

It may also include other transportation costs that are part of the student’s program, such as transportation to conferences and practical training.

The transportation allowance cannot include the cost of purchasing a car.

Many colleges use a standard transportation allowance for all students. However, if a student documents the distance from home to school and work is greater than the standard allowance, some colleges will use the IRS business mileage rate to calculate the transportation allowance, especially for commuter students.

However, if public transportation is available, the college may use the cost of a bus or train ticket, as they are usually lower. Some colleges provide free bus tickets to all of their students, and sometimes these are included with the student’s ID.

IRS historical mileage rates

Here are the IRS historical mileage rates for context, broken down by business miles, charitable miles, and medical or moving miles.