To claim the California mileage deduction for 2026, multiply your qualifying miles by the IRS standard rates the state adopts — 72.5 cents per business mile, 20.5 cents for medical or moving, and 14 cents for charitable driving — then report the result on your California return. The key difference from your federal return: California never followed the federal suspension of unreimbursed employee expenses, so W-2 workers here can still deduct business mileage their employer didn’t cover.
2026 Standard Mileage Rates California Uses
California conforms to the IRS standard mileage rates through its adoption of the relevant Internal Revenue Code provisions. For miles driven starting January 1, 2026:
- Business: 72.5 cents per mile, up from 70 cents in 2025. The rate covers depreciation, fuel, insurance, maintenance, and repairs.
- Medical: 20.5 cents per mile, down half a cent from 2025.
- Moving: 20.5 cents per mile. Federally this is limited to active-duty military and certain intelligence community members, but California still allows the moving deduction for any taxpayer who meets the distance and time requirements.
- Charitable: 14 cents per mile, a rate fixed by federal statute that doesn’t change year to year.
Parking fees and tolls paid on qualifying trips are deductible on top of the per-mile rate.1Internal Revenue Service. 2026 Standard Mileage Rates (Notice 2026-10)
Who Qualifies in California
Self-employed workers and independent contractors can deduct business mileage on both their federal and California returns, and the treatment is the same on each.
W-2 employees are where California parts ways with federal law. The Tax Cuts and Jobs Act suspended the federal deduction for unreimbursed employee business expenses from 2018 through 2025, leaving only narrow categories eligible at the federal level: Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related expenses.2Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile
California did not adopt that suspension. The Franchise Tax Board’s instructions for Schedule CA (540) state directly: “Under federal law, the deduction for miscellaneous itemized deductions subject to the 2% floor is suspended. California law does not conform.”3Franchise Tax Board. 2025 Instructions for Schedule CA (540) California Adjustments So a nurse driving between patient homes, a salesperson visiting clients, or a tradesperson traveling to temporary job sites can claim unreimbursed miles on the California return even though the federal write-off is gone.
What Driving Actually Counts
Your regular commute is never deductible. Driving from home to your normal workplace is a personal expense under both federal and California rules, no matter the distance.4Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
Qualifying business travel includes:
- Trips between two work locations on the same day.
- Travel to visit clients or customers, inspect properties, or perform services at a customer’s site.
- Driving from home to a temporary work site when you have a regular office elsewhere. “Temporary” means realistically expected to last one year or less.
- Travel to a business meeting held away from your regular workplace.
If you have no regular office and work in the metro area where you live, daily trips to work sites inside that metro area count as commuting. Only trips outside the metro area qualify as business travel in that situation.
Standard Rate or Actual Expenses
You get to pick between two methods, and the choice can be worth hundreds or thousands of dollars.
The standard mileage rate is simpler. Multiply qualifying miles by 72.5 cents and you’re done. Parking and tolls come on top; gas, insurance, repairs, and depreciation don’t, because the rate already accounts for them. This method usually favors newer, fuel-efficient cars with low running costs.5Internal Revenue Service. Car and Truck Expense Deduction Reminders
The actual expense method means tracking every operating cost — gas, oil, tires, repairs, insurance, registration, depreciation, lease payments — and deducting the business-use share. If 12,000 of 18,000 total miles were business, you deduct 66.7% of the year’s costs. Older cars, heavy-maintenance vehicles, and vehicles with expensive insurance often produce a bigger deduction this way, at the cost of more record-keeping.
One timing rule matters up front. To use the standard rate on a car you own, you must pick it the first year the vehicle is available for business. You can switch to actual expenses in a later year, but you cannot switch back. For a leased car, whichever method you choose applies for the whole lease term.
Running the Numbers
Split your logged miles by category, then apply the rate for each. Say you drove 15,000 business miles, 800 medical miles, and 200 charitable miles during 2026:
- Business: 15,000 × $0.725 = $10,875
- Medical: 800 × $0.205 = $164
- Charitable: 200 × $0.14 = $28
Each category is reported differently. The business figure reduces income directly, either on Schedule C for the self-employed or as an employee expense adjustment for W-2 workers in California. Medical mileage joins your other medical expenses and only counts to the extent the total exceeds 7.5% of adjusted gross income. Charitable mileage rides along with your charitable contributions. Add parking and tolls from business trips to the business total — they’re easy to miss.2Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile
Records You Need to Keep
Federal law requires you to substantiate vehicle expenses with records showing four things: the amount, the time and place of each trip, the business purpose, and the business relationship of anyone you visited. Without adequate records, the whole deduction can be disallowed.6Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses
A working mileage log captures, for each qualifying trip:
- The date.
- The destination and the name of the client, customer, or organization.
- A brief note on the business purpose.
- The miles driven.
Record the odometer on January 1 and December 31 so total annual miles are established and the business-versus-personal split is verifiable. Keeping the log current beats rebuilding it from memory at tax time; that’s often the line between a deduction that survives audit and one that doesn’t. The FTB can request these records, and a 25% penalty applies when a taxpayer fails to provide requested information. Keep parking and toll receipts with the log. GPS-based mileage apps generally meet the record-keeping standard, though you still have to note the business purpose for each trip.
Where It Goes on Your California Return
If you’re self-employed, business mileage goes on federal Schedule C and flows into California Form 540 without a state-specific adjustment.7Franchise Tax Board. 2025 California Resident Income Tax Return
W-2 employees have an extra step because of California’s non-conformity. Prepare federal Form 2106 using California amounts (California rules, not federal), then enter the result on Schedule CA (540), Part II, Line 19. Your total unreimbursed employee expenses are subject to a 2% adjusted gross income floor, so only the portion exceeding 2% of AGI is deductible.3Franchise Tax Board. 2025 Instructions for Schedule CA (540) California Adjustments
One filing note for self-employed drivers: CalFile, the FTB’s free e-file option, disqualifies anyone reporting business or farming income on Schedule C. If you’re deducting mileage as a self-employed filer, you’ll need commercial software or a preparer.8Franchise Tax Board. CalFile Qualifications 2025
When the Standard Rate Isn’t Available
The IRS blocks you from using the standard mileage method if any of these apply:
- You operate five or more vehicles at the same time (fleet use).
- You previously claimed depreciation on the vehicle using anything other than straight-line.
- You claimed a Section 179 deduction or special depreciation allowance on the vehicle.
- You used actual expenses on a leased car after 1997.
- You use the car for hire, such as a taxi or rideshare service.
If any of these fit your situation, actual expenses are your only path.9Internal Revenue Service. Topic No. 510 – Business Use of Car