Indiana Mileage Reimbursement 2026: A Regional Average

Indiana builds its state rate on something other than the Internal Revenue Service figure, which makes it unusual among the states. The Department of Administration and the State Budget Agency set 64 cents a mile from August 7, 2026, and their memorandum says how: the rate is calculated from an average of the state reimbursement rates in the PADD 2 Midwest region.

The same memorandum leaves the formula open. Depending on market conditions, it says, future adjustments may depart from it. Anyone who wants to know what Indiana will pay next needs the agencies' decision, not the federal announcement.

Indiana Code 4-12-1-13 and 4-13-1-4 place the rate with the Department of Administration and the State Budget Agency. Their memorandum commits to an annual review in May and reserves the right to adjust the rate outside it, so the state can move at a time the federal schedule does not.

The August 2026 change is an example of the second path rather than the first: it arrived in the middle of the year, after the federal rate had already moved on July 1, and it set a figure that is below the federal one rather than equal to it.

The figure applies to travel on or after August 7, 2026; earlier travel in 2026 is priced at whatever the two agencies had in force before that date, which the state's rate page lists by effective date. A state employee driving 400 business miles after the change is paid 256 dollars at 64 cents a mile. The same miles at the federal rate for the second half of 2026 would pay 304 dollars, which is the gap the Indiana formula opens and the reason a private employer's figure cannot be read off the state's.

The comparison is not an argument that one figure is right. It is the difference between two instruments: a state payroll rate built from neighbouring states' figures, and a federal rate built for tax purposes.

Indiana's rate binds state employees and no one else. A private claim follows the employer's written policy, and where that policy tracks the federal rate the trip prices at 72.5 cents per mile through June 30, 2026 and 76 cents per mile from July 1.

• Do not use the state figure as a benchmark for a private policy: Indiana's 64 cents is a regional average, not a federal rate.
• Keep the travel date, since Indiana changed its rate in August rather than at the start of the year or the middle of it.
• If the policy pays a lease or allowance instead of mileage, ask how it compares, which is the analysis the state itself publishes.

The Indiana Department of Administration publishes these figures. State employees traveling on state business in a personal vehicle. The rate is a payroll figure for state government.

The figure is an average of the PADD 2 Midwest state reimbursement rates rather than a federal rate, and the agencies say a future adjustment may depart from the formula.

An annual review each May sets the expectation; an adjustment outside it is what produced the August 2026 figure.

The IRS moved the business standard mileage rate mid-year, so a 2026 trip prices by its date. This is the benchmark an employer's rate method usually follows.

The IRS has not published a standard mileage rate for 2027. Until it does, two things decide what a trip pays: the year you drove it and the date within that year. A 2026 trip pays 72.5 cents per mile through June 30 and 76 cents per mile from July 1. Miles driven from January 1, 2027 will use whatever figure the IRS publishes next.

The next year's rate has arrived in December in each of the last nine years, between December 14 and December 31. An announcement is not always the last word. The IRS raised the 2026 figure on July 1, halfway through the year, so a 2027 claim may need two rate periods.

A state that publishes a rate for its own travelers follows its own calendar, so it can publish the next period before the IRS does. A private employer's rate changes when its own policy changes, or when the benchmark that policy follows moves. It does not change because the calendar year turns.