IRS announces medical mileage rate increase

Key takeaways:

• The IRS increased the standard medical mileage rate to 22 cents per mile, up from 18 cents, effective July 1, 2022.

• The rate applies when using a personal vehicle to obtain medical care, which may be tax-deductible under IRC § 213.

• Medical mileage is generally an eligible reimbursement expense under FSAs, HRAs, and HSAs.

• No immediate action is required, but taxpayers should note the updated rate and its effective date when filing their 2022 income taxes.

Relief at the gas pump? We all need it. For consumers traveling by car to receive medical care, every mile can add up. To offset high gas prices, on June 9, 2022, the Internal Revenue Service (IRS) announced an increase in the 2022 standard medical mileage rate for the final six months of 2022.¹

Effective July 1, 2022, the new rate for when an automobile is used to obtain medical care—which may be deductible under Internal Revenue Code § 213 if it is primarily for, and essential to, the medical care—is 22 cents per mile for the remainder of 2022, which is an increase from the rate of 18 cents per mile effective January 1 – June 30, 2022.²

What did the IRS change, and when did it take effect?

Effective July 1, 2022, the IRS increased the standard medical mileage rate for the final six months of 2022.

Note: This rate applies when an automobile is used to obtain medical care, and it may be deductible under Internal Revenue Code § 213 if it’s primarily for, and essential to, the medical care.

What expenses are eligible, and which accounts can reimburse them?

Eligible expenses

Mileage to and from a medical service is generally an eligible expense under a:

• Healthcare Flexible Spending Account (FSA)

• Health Reimbursement Arrangement

• Health Savings Account (HSA)

What action should benefits teams take?

You typically won’t need to take direct plan action for this change, but you can make a meaningful impact by helping employees use their benefits correctly. Consider these quick, high-value steps:

• Refresh your employee communications: Include the updated rate and the effective date so employees don’t apply the wrong number to the wrong time period.

• Encourage good documentation habits: Remind employees to keep simple records of dates, destinations, and miles driven for medical care.

• Coordinate with vendors or internal teams: If you offer claims substantiation tools or education for FSA, HRA, or HSA use, make sure materials reflect the updated rate for July through December 2022.

• Set expectations for tax filing: Employees should note the change when preparing their Calendar Year 2022 income tax filings.