IRS Announces Mid-Year Increase in Mileage Rates for Transportation to Obtain Medical Care

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Due to recent gasoline price increases, the IRS has announced in Announcement 2008-63 dated June 24, 2008, an eight-cent mid-year increase in the standard mileage rate for calculating the cost of using an automobile to obtain medical care. (Such use may be deductible under Code Section 213 if it is primarily for, and essential to, medical care.)

Beginning July 1, 2008, the rate will increase from 19 cents to 27 cents per mile. As a result of this change, health FSAs and HRAs that allow reimbursement for medical transportation expenses may reimburse those expenses at the higher 27-cents-per-mile rate for expenses incurred July 1, 2008 or later. Also, HSA account holders may use the new standard mileage rate to calculate the tax-free distributions they can take for medical transportation expenses that meet the Code Section 213 definition of medical care.

Click here to read Announcement 2008-63 (PDF)
Click Here to read IRS Notice IR-2008-82

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