The State of Mileage Deductions in 2026

2026 is the first full year under permanent W-2 deduction elimination. The IRS rate climbed to 72.5 cents. Several states layered on or strengthened reimbursement rules. Here is the snapshot.

What changed in 2026

• IRS standard rate up to 72.5¢/mile from 70¢ in 2025. Largest year-over-year increase since 2022's mid-year fuel-spike adjustment.
• W-2 deduction permanently eliminated. The 2017 TCJA suspension was made permanent by the 2025 One Big Beautiful Bill. Self-employed unaffected.
• Medical and moving rate at 22¢/mile, charitable rate stays at 14¢/mile.
• Self-employment tax thresholds unchanged. $400 floor for SE tax, Social Security wage base bumped slightly with inflation.

What stayed the same

• Schedule C, line 9 still the home for business mileage.
• Same four-field log requirement (date, destination, business purpose, miles).
• Same standard-vs-actual choice with the first-year rule.
• Contemporaneous log still beats reconstructed log under audit.

What changed for gig drivers

Platform tax summaries continue to under-count deductible miles by 30-50 percent for full-time drivers. Deadhead miles and period 1 (online-but-waiting) miles are still IRS-eligible deductions even though no platform records them. The gap between platform-reported and actual deductible miles widened slightly as platforms tightened their definitions.

What changed at the state level

No new states added mandate-reimbursement laws in 2026, but Illinois's wage-act enforcement strengthened with new DOL guidance. California Labor Code §2802 saw three notable settlements over six-figure reimbursement shortfalls at large employers, raising the cost-of-non-compliance signal. Full state breakdown.

International

CRA tiered rates for Canada bumped to 73¢/km tier 1 (under 5,000 km) and 67¢/km tier 2 for 2026, up 1¢ at each tier from 2025. HMRC AMAP rates remained frozen at 45p/mile (10K) and 25p (above). 13 years without an increase. ATO cents-per-km for Australia rose with inflation. Canada, UK, Australia details.

What is on the horizon for 2027

Three policy threads worth watching: (1) Discussion of raising the 14¢ charitable rate from a 1997 statute that has not changed in 28 years. (2) Possible IRS guidance on EV-specific mileage rates as electric vehicles become a larger share of the on-road fleet. (3) Continued state-level pressure on employer reimbursement, with Colorado and Oregon legislators floating bills modeled on California §2802.

What every driver should do this year

• Track contemporaneously. Auto-detection apps timestamp trips at the moment they happen.
• If gig: ignore platform mileage summaries; trust your independent tracker.
• If W-2 in a mandate state: log every business mile and submit reimbursement requests on schedule.
• If self-employed: deduct mileage on Schedule C at 72.5¢/mile.

Track every business mile in 2026. Start free with TruMile →