The 2026 IRS Mileage Rate Changed Mid-Year — Here's How to Split Your Miles

For most of the last decade, claiming business mileage meant looking up one number for the year and multiplying. 2026 broke that habit. The IRS raised the business standard mileage rate part-way through the year, so a single year of driving now has to be deducted at two different rates, split at July 1.

Here are both, and the rule for dividing your log between them.

The 2026 rates

Period	Business	Medical / military moving	Charitable
Jan 1 – Jun 30, 2026	72.5¢	20.5¢	14¢
Jul 1 – Dec 31, 2026	76¢	23.5¢	14¢

The first set came from Notice 2026-10, issued in the usual December announcement. The second came from Announcement 2026-11, which the IRS attributed to increases in the price of fuel.

For comparison, all of 2025 ran at a flat 70¢ business, 21¢ medical/moving, 14¢ charitable. So business driving in the back half of 2026 is worth 6¢ a mile more than the same trip a year earlier — about $600 more on 10,000 business miles.

The charitable rate did not move, and won’t: unlike the other two, it is fixed in statute rather than recalculated from cost data. That is why it has sat at 14¢ for years while the business rate climbed.

The rule: miles are assigned by the date you drove them

This is the part people get wrong. The revised rates apply to deductible transportation expenses paid or incurred on or after July 1, 2026. What matters is the date of the trip — not:

• the date you file,
• the date your client or employer reimbursed you,
• the date you got around to writing the log up.

A December invoice covering an April trip is still April driving, deducted at the first-half rate.

So the arithmetic is:

deduction = business miles driven Jan 1 – Jun 30  ×  0.725
          + business miles driven Jul 1 – Dec 31  ×  0.76

Medical and military-moving miles split the same way, at their own two rates. Charitable miles use 14¢ regardless of when you drove them.

A worked example

A self-employed contractor logs 14,000 business miles across 2026: 6,200 before July, 7,800 after.

first half   6,200 × 0.725  =  $4,495
second half  7,800 × 0.76   =  $5,928
                    total   =  $10,423

Now watch what the shortcuts cost:

• Applying 76¢ to the whole year — the mistake you make by grabbing the current rate off a search result — gives $10,640. That’s $217 of deduction you can’t support if anyone asks to see the log.
• Applying 72.5¢ to the whole year — the mistake you make by using the rate you noted in January — gives $10,150. You just donated $273 of deduction to the Treasury for no reason.

Neither error is enormous. Both are entirely avoidable, and the second one is the more common of the two.

Run your own split

Set the rate period, enter that period’s miles, note the total, then switch periods and do the second half. The two totals add.

If your log isn’t already split by date, this is the year to fix that. Most mileage apps can export a date-filtered report; a spreadsheet with a date column sorts in one click. Reconstructing which trips fell before July from memory is exactly the sort of estimate that does not survive an audit.

Why this happened, and whether to expect it again

Mid-year revisions are rare. Before 2026, the last one was 2022, when the IRS raised the business rate by 4 cents to 62.5¢ effective July 1 — and before that, 2011. The IRS noted at the time that mid-year increases are unusual; both were responses to sharp fuel-price moves.

The mechanism is straightforward. The business rate is meant to approximate the real cost of operating a car — fuel, maintenance, insurance, depreciation — based on an annual cost study. When fuel moves far enough mid-year that the December figure stops resembling reality, the rate can be revised rather than left wrong for six months.

The practical takeaway isn’t “expect this every year.” It’s that the rate is a variable, not a constant, and any process that hardcodes it — a spreadsheet template, an expense policy, a reimbursement rate in your payroll system — needs a date on it and a review.

If you reimburse employees

Two things worth checking if you run the payroll side:

• A reimbursement at or below the standard rate, under an accountable plan with substantiated mileage, is generally not taxable wages. Pay above the rate and the excess is normally treated as taxable compensation.
• A flat monthly car allowance is not the same thing. It’s usually taxable regardless of miles driven, which is why the per-mile route often nets the employee more. That comparison is its own calculation — see car allowance vs mileage reimbursement.

If you set your reimbursement rate at 72.5¢ in January and never revisited it, employees driving in the second half are now being reimbursed below the federal figure. Not illegal — the IRS rate is a ceiling for tax-free treatment, not a required wage — but worth a deliberate decision rather than an oversight.

What this doesn’t settle

• Whether the standard rate is even your best method. The actual-expense method — real operating cost times business-use share — can beat it for expensive vehicles or low business mileage, and the first-year election can lock you out of switching later. That trade-off is worked through in standard mileage vs actual expenses.
• Whether your miles are deductible at all. Commuting between home and your regular workplace never counts, in either half of the year, under either method.
• Who can claim unreimbursed employee mileage. The rules here have moved with recent tax legislation and depend on your filing situation. Confirm current treatment before assuming.

The one-line version

Split your 2026 log at July 1: 72.5¢ a mile before, 76¢ after. Sum the two. Don’t apply one rate to the whole year in either direction.

Related reading & calculators

• Mileage Reimbursement Calculator — both periods preloaded, plus the actual-expense comparison.
• Standard Mileage vs Actual Expenses — which method claims more, and the election that locks it in.
• Cost Per Mile Calculator — what a mile actually costs you, to compare against the federal figure.
• Car Allowance vs Mileage Reimbursement — which structure pays the driver more.

AutoMath is an educational tool, not tax advice. Rates and eligibility rules change — verify against the IRS standard mileage rates page or a qualified tax professional before filing.