In response to rising fuel costs, the U.S. Internal Revenue Service (IRS) announced a mid-year increase to the optional standard mileage rates used to calculate deductible automobile costs for business, medical, or moving purposes. The increase is effective July 1, 2026. 

The following rates apply to eligible travel from July 1, 2026, through December 31, 2026: 

• Business use: 76 cents per mile. 

• Medical or moving purposes: 23.5 cents per mile.  

The rates in effect for eligible travel from January 1, 2026, through June 30, 2026, were: 

• Business use: 72.5 cents per mile. 

• Medical or moving purposes: 20.5 cents per mile. 

While there is no federal law mandating mileage reimbursement for employees, the state of California, under Labor Code section 2802, requires employers to reimburse employees for mileage incurred in the course of their employment.