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Wednesday, December 31, 2025
QuickAlerts - Technical New Modernized e-File (MeF) Business Returns Schemas and Business Rules are Available
QuickAlerts - Technical - Form 1040 Series Tax Year 2025, Business Rules and Schema are available
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IR-2025-129: Treasury, IRS provide guidance on the new deduction for car loan interest under the One, Big, Beautiful Bill
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News EssentialsThe Newsroom TopicsIRS Resources | Issue Number: IR-2025-129Inside This IssueTreasury, IRS provide guidance on the new deduction for car loan interest under the One, Big, Beautiful Bill IR-2025-129, Dec. 31, 2025 WASHINGTON — The Department of the Treasury and the Internal Revenue Service today provided guidance on the "No Tax on Car Loan Interest" provision enacted under the One, Big, Beautiful Bill. The proposed regulations issued today relate to a new deduction for interest paid on vehicle loans incurred after Dec. 31, 2024, to purchase new made-in-America vehicles for personal use. This new tax benefit applies to both taxpayers who take the standard deduction and those who itemize deductions. Who can take a deduction for interest on car loans To help taxpayers take advantage of this new tax benefit, today's guidance addresses important eligibility criteria, including:
What lenders need to know The IRS previously announced transition guidance for certain lenders and other taxpayers receiving interest for vehicle loans in 2025. In general, those persons must file information returns with the IRS to report interest received during the tax year and other information related to the loan. These information returns enable taxpayers to claim the benefits of the vehicle loan interest deduction. To help lenders implement these information reporting requirements, the proposed regulations clarify:
More information Treasury and IRS invite comments from the public on these proposed regulations by Feb. 2, 2026. Comments can be submitted through Regulations.gov and instructions can be found in the proposed regulations. For more information, see One, Big, Beautiful Bill provisions on IRS.gov.
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Monday, December 29, 2025
UPDATED: IR-2025-128: IRS sets 2026 business standard mileage rate at 72.5 cents per mile, up 2.5 cents
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News EssentialsThe Newsroom TopicsIRS Resources | Issue Number: IR-2025-128Inside This IssueUPDATED IRS sets 2026 business standard mileage rate at 72.5 cents per mile, up 2.5 cents IR-2025-128, Dec. 29, 2025 WASHINGTON — The Internal Revenue Service today announced that the optional standard mileage rate for business use of automobiles will increase by 2.5 cents in 2026, while the mileage rate for vehicles used for medical purposes will decrease by half a cent, reflecting updated cost data and annual inflation adjustments.
Optional standard mileage rates are used to calculate the deductible costs of operating vehicles for business, charitable, and medical purposes. Additionally, the optional standard mileage rate may be used to calculate the deductible costs of operating vehicles for moving purposes for certain active-duty members of the Armed Forces, and now, under the One, Big, Beautiful Bill, certain members of the intelligence community.
Beginning Jan. 1, 2026, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles. While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study.
Under the law, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, except for certain educator expenses. However, deductions for expenses that are deductible in determining adjusted gross income remain allowable, such as for certain members of a reserve component of the Armed Forces, certain state and local government officials, certain performing artists, and eligible educators. Alternatively, eligible educators may claim an itemized deduction for certain unreimbursed employee travel expenses. In addition, only taxpayers who are members of the military on active duty or certain members of the intelligence community may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station.
Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle.
Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses.
For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals.
Notice-2026-10 contains the optional 2026 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2026 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule.
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Phase-Out of Energy Credits Online for Clean Vehicle Credits Portal Begins in 2026
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News EssentialsThe Newsroom TopicsCredits and Deductions Under the Inflation Reduction Act of 2022 IRS Resources | Important: Phase-Out of the Energy Credits Online (ECO) for Clean Vehicle Credits Portal Begins in 2026 Effective February 1, 2026, you will no longer be able to submit edits, returns or cancellation requests for calendar year 2024 sales through the Energy Credits Online (ECO) portal. Effective March 1, 2026, you will no longer be able to submit late time of sale reports for calendar year 2024 sales through the ECO portal. Take action now. It is crucial that you promptly submit time of sale reports, returns, and cancellations to allow sufficient time for processing. This will help your customers avoid problems when trying to claim the credit on their tax returns during the upcoming filing season. Reminder: You Must Repay the Advance Payment of the Clean Vehicle Credit When Returning or Cancelling a Time of Sale Report
For more information on the expiration of the clean vehicle credits, see Fact Sheet 2025-05.
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IR-2025-128: IRS sets 2026 business standard mileage rate at 72.5 cents per mile, up 2.5 cents
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News EssentialsThe Newsroom TopicsIRS Resources | Issue Number: IR-2025-128Inside This IssueIRS sets 2026 business standard mileage rate at 72.5 cents per mile, up 2.5 cents IR-2025-128, Dec. 29, 2025 WASHINGTON — The Internal Revenue Service today announced that the optional standard mileage rate for business use of automobiles will increase by 2.5 cents in 2026, while the mileage rate for vehicles used for medical purposes will decrease by half a cent, reflecting updated cost data and annual inflation adjustments.
Optional standard mileage rates are used to calculate the deductible costs of operating vehicles for business, charitable, and medical purposes. Additionally, the optional standard mileage rate may be used to calculate the deductible costs of operating vehicles for moving purposes for certain active-duty members of the Armed Forces, and now, under the One, Big, Beautiful Bill, certain members of the intelligence community.
Beginning Jan. 1, 2026, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles. While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study.
Under the law, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, except for certain educator expenses. However, deductions for expenses that are deductible in determining adjusted gross income remain allowable, such as for certain members of a reserve component of the Armed Forces, certain state and local government officials, certain performing artists, and eligible educators. Alternatively, eligible educators may claim an itemized deduction for certain unreimbursed employee travel expenses. In addition, only taxpayers who are members of the military on active duty or certain members of the intelligence community may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station.
Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle.
Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses.
For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals.
Notice-2026-10 contains the optional 2026 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2026 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule.
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