The IRS has released the 2026 standard mileage rates, effective January 1, 2026, reflecting updated cost data and inflation adjustments. While mileage rates may seem like a small detail, they directly affect nonprofit reimbursement policies, volunteer expenses, and compliance practices.
Below is a breakdown of the new rates and what they mean for nonprofit organizations.
2026 Standard Mileage Rates
Beginning January 1, 2026, the IRS standard mileage rates are:
- 72.5 cents per mile for business use
(Increase of 2.5 cents from 2025) - 14 cents per mile for charitable use
(No change — this rate is set by statute) - 20.5 cents per mile for medical purposes
(Decrease of 0.5 cents) - 20.5 cents per mile for moving expenses
(Available only to eligible active-duty military members and certain members of the intelligence community)
These rates apply to gasoline, diesel, hybrid, and fully electric vehicles.
What This Means for Nonprofits
1. Volunteer Mileage Reimbursement Remains the Same
Nonprofits reimbursing volunteers for charitable service mileage must continue using the 14¢ per mile rate. Unlike business mileage, the charitable rate does not adjust annually for inflation.
2. Business Mileage Costs Increase
The higher business mileage rate may affect:
- Employee reimbursements
- Contractor expense policies
- Budgeting for travel-heavy programs
Organizations should ensure internal reimbursement policies are updated for 2026.
3. Documentation Still Matters
Whether using standard mileage rates or actual expenses, nonprofits should continue to require:
- Mileage logs
- Dates, destinations, and business purpose
- Proper approval and substantiation
Strong documentation supports both financial controls and audit readiness.
Standard Mileage Rate vs. Actual Expenses
Use of the standard mileage rate is optional. Taxpayers and organizations may instead calculate actual vehicle expenses, subject to IRS rules.
Important considerations:
- For owned vehicles, the standard mileage rate must be chosen in the first year the vehicle is used for business.
- For leased vehicles, the standard mileage rate must be used for the entire lease term, including renewals.
Planning Ahead for 2026
With 2026 approaching, nonprofits should:
- Review mileage and travel reimbursement policies
- Update employee and volunteer handbooks if necessary
- Consider the budget impact of increased business mileage rates
- Communicate changes clearly to staff and volunteers
Proactive planning helps avoid compliance issues and ensures consistent treatment across the organization.
If you have questions about how the 2026 mileage rates apply to your nonprofit’s reimbursement or compliance policies, consult with a nonprofit tax professional to ensure proper implementation.
TrimnerBeckham, PLLC
