In recognition of the recent gasoline price increases, the Internal Revenue Service (the “IRS”) announced on June 9, 2022 that it was increasing the optional standard mileage rate for the final six months of 2022. This change took effect on July 1, 2022 and will continue to be in effect through December 31, 2022.
For the final six months of 2022, the standard mileage rate for the use of cars, vans, pickups or panel trucks are the following:
Purpose | Jan. 1 thru June 30, 2022 | July 1 thru December 31, 2022 |
For business use | 58.5 cents per mile | 62.5 cents per mile |
For medical care and for moving active-duty members of the Armed Forces | 18 cents per mile | 22 cents per mile |
In service of charitable organizations | 14 cents per mile | 14 cents per mile |
Normally, the IRS reviews and updates its standard mileage rates once per year in the fall for the following calendar year. It should be noted that these midyear increases in the optional mileage rates are rare as the IRS has not instituted an adjustment like this since 2011. Further, the new standard mileage rate for the business use of employees’ vehicles is currently the highest rate the IRS has ever published.
Employers should note that they are typically required to reimburse employees for the business use of personally owned vehicles that are required for the performance of their jobs, excluding routine commuting costs. Employers also have the choice to calculate the actual costs of employees using their vehicle as part of their job instead of using the standard mileage rates provided by the IRS.