IRS Issues Mid-Year Medical Mileage Rate Update and Other 2026 Tax Guidance

The IRS recently released Internal Revenue Bulletin 2026-29, which includes several tax-related updates. Of particular interest to employers and employees, the IRS announced a revision to the optional standard mileage rates effective July 1, 2026, including an updated rate for medical mileage reimbursement when substantiating qualifying transportation expenses to obtain medical care. 

The bulletin also contains guidance related to federal tax credits for clean energy initiatives, including nuclear power production, hydrogen production, clean fuel production, and marginal well natural gas production. These provisions primarily affect businesses operating in the energy sector.  

IRS Increases Medical Mileage Rate Effective July 1, 2026

The updated medical mileage rate applies to qualifying travel to obtain medical care occurring on or after July 1, 2026.  

The revised medical mileage rate is:

23.5 cents per mile for medical mileage to obtain care, up from 20.5 cents per mile.

Employers Should Know

The higher rate increases reimbursable medical mileage expenses incurred during the second half of 2026. Generally, plan documents do not need to be updated as the mileage rate is not specified. There’s no action required on the part of plan sponsors.

Impact on Employees

Employees and participants who use personal vehicles to travel for eligible medical care can claim higher medical mileage reimbursement for mileage incurred on or after July 1, 2026. It is important to maintain accurate mileage records and confirm the applicable reimbursement process.  

This marks the IRS’s first mid-year mileage rate adjustment since 2022. Please visit our Help Center article, which highlights many IRS benefit-related contribution limits and rates.

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