IRS Increases Mileage Reimbursement Rates Mid-Year: Employers May Need to Make Retroactive Adjustments
Posted July 16, 2026

In an unusual mid-year change, the Internal Revenue Service (“IRS”) has increased the standard mileage reimbursement rates effective July 1, 2026. As a result, employers that reimburse employees for business travel using the IRS standard mileage rate should review any mileage reimbursements already issued on or after July 1 and determine whether supplemental payments are necessary.

New IRS Mileage Rates Effective July 1, 2026

For the period July 1 through December 31, 2026, the IRS standard mileage rates for cars, vans, pickups, and panel trucks are:

• 76 cents per mile driven for business use, up from 72.5 cents;
• 23.5 cents per mile driven for medical purposes, up from 20.5 cents;
• 23.5 cents per mile driven for moving purposes by qualified active-duty members of the Armed Forces and certain intelligence personnel, up from 20.5 cents; and
• 14 cents per mile driven in service of charitable organizations, with no change.

Employers Should Review July Mileage Reimbursements

Because the rate increase is retroactive to July 1, 2026, employers that have already processed mileage reimbursement requests for travel occurring on or after that date should review those payments. Employees reimbursed at the prior business mileage rate of 72.5 cents per mile may be entitled to an additional 3.5 cents per mile for qualifying business travel occurring on or after July 1.

Employers using the IRS standard mileage rate as their reimbursement methodology should consider issuing supplemental reimbursement payments to ensure employees are fully reimbursed for work-related vehicle expenses.

For questions about employment law issues, contact the attorneys at LightGabler LLP.

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