The Internal Revenue Service has announced new mileage rates for 2026 for use in calculating reimbursements or deductions for tax purposes:
- Business use: 72.5 cents a mile, up from 70 cents a mile from the 2025 rate.
- Medical use: 20.5 cents a mile, down from 21 cents a mile in 2025.
- Moving use: 20.5 cents a mile, down from 21 cents a mile in 2025.
- Charitable use: 14 cents a mile, the same as in 2025.
The rates apply to fully electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.
Additionally, the standard vehicle cost used to calculate FAVR (Fixed and Variable Rate) programs may not exceed $61,700, up from $61,200 in 2025.
To read more, IRS Notice 2026-10 may be found on the IRS website here.
Is your company seeking a more accurate vehicle reimbursement solution than the IRS-standard mileage rate? Is the IRS-standard mileage rate creating unpredictable cashflows and becoming too expensive for your company right now? Let’s connect, and we’ll show you how a FAVR (Fixed and Variable Rate) plan can reduce cost when compared to the IRS rate for business use.
AutoReimbursement.com’s Vehicle Reimbursement Program Comparison Guide explains alternative reimbursement programs, like a Fixed and Variable Rate Program, and how it can provide cost savings to your company as well as benefit your drivers.