On June 9, 2022, the Internal Revenue Service (IRS) announced it was increasing the standard mileage rate from 58.5 cents a mile to 62.5 cents per mile. This increase goes into effect on July 1, 2022, and remains in effect for the rest of 2022. As we are painfully aware, the average cost for a gallon of gas has increased to well over $5.00 in Michigan and it is anticipated to go much higher in the coming months. Given the heavy burden created by the out-of-pocket expense for gasoline, the federal mileage increase will help relieve some of the sting. However, employers that reimburse their employees at the full standard rate will need to budget for this increased employer expense.
According to Chuck Rettig, IRS Commissioner "The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,". "We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate." While this change is not unexpected, the timing of it is. Normally, the IRS adjusts the standard mileage rate prior to the new calendar year. This early adjustment certainly speaks to the significant burden the cost of gas is creating for all.
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