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What 2026 U.S. Tax Law Means for Corporate Relocation & Mobility
As global mobility teams prepare for the 2026 tax year, U.S. tax law changes enacted in 2025 carry significant ramifications for relocation policy design, cost modeling, and assignee experience.
IRS Mileage Rates and Expense Reporting for 2026
Although the moving expense deduction is broadly suspended, the IRS released its 2026 standard mileage rates that continue to apply when specific taxpayers (e.g., military or intelligence community members relocating under qualifying orders) claim allowable moving expense deductions.1
Relocation teams should incorporate updated mileage rates (72.5 cents per mile) within policy, expense estimate tools and counsel relocating employees appropriately where the mileage rate applies.
Broader Employee Benefit and Deduction Changes
2026 tax brackets and rates, standard deductions, and retirement contribution limits were all modified to help keep up with inflation. Higher income thresholds may help an individual avoid moving into a higher tax bracket, while increased deduction amounts may lower an individual’s taxable income.
IRS tax inflation adjustments for 20262 that will apply when filing during the 2027 tax season include:
Planning Implications
Staying abreast of these changes enables relocation professionals to mitigate unexpected tax liabilities and optimize relocation packages that remain competitive -- and compliant -- with evolving laws. Relocation teams should ensure program design and cost models reflect four core areas:
- Gross-ups: Ensure taxable relocation reimbursements are properly grossed up to maintain net benefit value.
- Non-deductibility: Communicate clearly that most employee-paid moving costs are not deductible.
- Exceptions: Highlight limited cases for military or intelligence personnel.
- Expense Reporting: Update tracking and reporting to align with IRS guidance and state tax requirements.
For NEI current clients, this has been reviewed for your situation and compliance. NEI is committed to helping you navigate all changes as they occur and is ready to assist anyone needing solutions that keep their mobility programs compliant, competitive, and aligned with their business strategies.
If you would like to discuss this or any other issue in greater detail, please reach out to your NEI representative at 800.533.7353.
The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.
Resources
- IRS Notice 2026-10 and standard mileage rates details
- Quick Guide to 2026 IRS Tax Changes and Inflation Adjustments – Mercer
What 2026 U.S. Tax Law Means for Corporate Relocation & Mobility
As global mobility teams prepare for the 2026 tax year, U.S. tax law changes enacted in 2025 carry significant ramifications for relocation policy design, cost modeling, and assignee experience.
IRS Mileage Rates and Expense Reporting for 2026
Although the moving expense deduction is broadly suspended, the IRS released its 2026 standard mileage rates that continue to apply when specific taxpayers (e.g., military or intelligence community members relocating under qualifying orders) claim allowable moving expense deductions.1
Relocation teams should incorporate updated mileage rates (72.5 cents per mile) within policy, expense estimate tools and counsel relocating employees appropriately where the mileage rate applies.
Broader Employee Benefit and Deduction Changes
2026 tax brackets and rates, standard deductions, and retirement contribution limits were all modified to help keep up with inflation. Higher income thresholds may help an individual avoid moving into a higher tax bracket, while increased deduction amounts may lower an individual’s taxable income.
IRS tax inflation adjustments for 20262 that will apply when filing during the 2027 tax season include:
Planning Implications
Staying abreast of these changes enables relocation professionals to mitigate unexpected tax liabilities and optimize relocation packages that remain competitive -- and compliant -- with evolving laws. Relocation teams should ensure program design and cost models reflect four core areas:
- Gross-ups: Ensure taxable relocation reimbursements are properly grossed up to maintain net benefit value.
- Non-deductibility: Communicate clearly that most employee-paid moving costs are not deductible.
- Exceptions: Highlight limited cases for military or intelligence personnel.
- Expense Reporting: Update tracking and reporting to align with IRS guidance and state tax requirements.
For NEI current clients, this has been reviewed for your situation and compliance. NEI is committed to helping you navigate all changes as they occur and is ready to assist anyone needing solutions that keep their mobility programs compliant, competitive, and aligned with their business strategies.
If you would like to discuss this or any other issue in greater detail, please reach out to your NEI representative at 800.533.7353.
The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.
Resources
- IRS Notice 2026-10 and standard mileage rates details
- Quick Guide to 2026 IRS Tax Changes and Inflation Adjustments – Mercer
What 2026 U.S. Tax Law Means for Corporate Relocation & Mobility
As global mobility teams prepare for the 2026 tax year, U.S. tax law changes enacted in 2025 carry significant ramifications for relocation policy design, cost modeling, and assignee experience.
IRS Mileage Rates and Expense Reporting for 2026
Although the moving expense deduction is broadly suspended, the IRS released its 2026 standard mileage rates that continue to apply when specific taxpayers (e.g., military or intelligence community members relocating under qualifying orders) claim allowable moving expense deductions.1
Relocation teams should incorporate updated mileage rates (72.5 cents per mile) within policy, expense estimate tools and counsel relocating employees appropriately where the mileage rate applies.
Broader Employee Benefit and Deduction Changes
2026 tax brackets and rates, standard deductions, and retirement contribution limits were all modified to help keep up with inflation. Higher income thresholds may help an individual avoid moving into a higher tax bracket, while increased deduction amounts may lower an individual’s taxable income.
IRS tax inflation adjustments for 20262 that will apply when filing during the 2027 tax season include:
Planning Implications
Staying abreast of these changes enables relocation professionals to mitigate unexpected tax liabilities and optimize relocation packages that remain competitive -- and compliant -- with evolving laws. Relocation teams should ensure program design and cost models reflect four core areas:
- Gross-ups: Ensure taxable relocation reimbursements are properly grossed up to maintain net benefit value.
- Non-deductibility: Communicate clearly that most employee-paid moving costs are not deductible.
- Exceptions: Highlight limited cases for military or intelligence personnel.
- Expense Reporting: Update tracking and reporting to align with IRS guidance and state tax requirements.
For NEI current clients, this has been reviewed for your situation and compliance. NEI is committed to helping you navigate all changes as they occur and is ready to assist anyone needing solutions that keep their mobility programs compliant, competitive, and aligned with their business strategies.
If you would like to discuss this or any other issue in greater detail, please reach out to your NEI representative at 800.533.7353.
The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.
Resources
- IRS Notice 2026-10 and standard mileage rates details
- Quick Guide to 2026 IRS Tax Changes and Inflation Adjustments – Mercer
