n-18-42.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

# Update of 2018 Standard Mileage Rates Notice

Notice 2018-42

This notice modifies Notice 2018-03, 2018-2 I.R.B. 285 (released to the Public
Dec. 14, 2017), in light of Public Law 115-97 (Dec. 22, 2017), which made amendments
to §§ 67 and 217 of the Internal Revenue Code. Notice 2018-03 provided the optional
2018 standard mileage rates for taxpayers to use in computing the deductible costs of
operating an automobile for business, charitable, medical, or moving expense purposes.

Section 3 of Notice 2018-03 identified a standard mileage rate of 54.5 cents per
mile for all miles of business use (business standard mileage rate) that taxpayers were
to use, including to deduct unreimbursed employee travel expenses as a miscellaneous
itemized deduction under § 67. Public Law 115-97 (section 11045) suspends all
miscellaneous itemized deductions that are subject to the two-percent of adjusted gross
income floor under § 67, including unreimbursed employee travel expenses. This
suspension applies to taxable years beginning after December 31, 2017, and before
January 1, 2026. Thus, the business standard mileage rate listed in Notice 2018-03
cannot be used to claim an itemized deduction for unreimbursed employee travel
expenses during the suspension. Notwithstanding the foregoing suspension of
miscellaneous itemized deductions, deductions for expenses that are deductible in
determining adjusted gross income are not suspended. For example, members of a
reserve component of the Armed Forces of the United States, state or local government

<!-- PageBreak -->

officials paid on a fee basis, and certain performing artists are entitled to deduct
unreimbursed employee travel expenses as an adjustment to total income on line 24 of
Form 1040 (2017), not as an itemized deduction on line 21 of Schedule A of Form 1040
(2017), and therefore may continue to use the business standard mileage rate.

For the use of an automobile as a part of a move for which the expenses are
deductible under § 217, section 3 of Notice 2018-03 provided a standard mileage rate of
18 cents per mile. For taxable years beginning after December 31, 2017, and before
January 1, 2026, Public Law 115-97 (section 11049) suspends the deduction for moving
expenses. This suspension does not apply to members of the Armed Forces of the
United States on active duty who move pursuant to a military order and incident to a
permanent change of station to whom § 217(g) applies. Thus, other than those to
whom § 217(g) applies, the standard mileage rate is not applicable for the use of an
automobile as part of a move occurring during the suspension.

Section 5 of Notice 2018-03 identified a maximum standard automobile cost of
$27,300 for passenger automobiles (excluding trucks and vans) and $31,000 for trucks
and vans for purposes of computing the allowance under a fixed and variable rate
(FAVR) plan. Public Law 115-97 (section 13202), however, increases the depreciation
limitations for passenger automobiles placed in service after December 31, 2017. As a
result, the maximum standard automobile cost may not exceed $50,000 for passenger
automobiles (including trucks and vans) placed in service after December 31, 2017.

<!-- PageBreak -->

# EFFECT ON OTHER DOCUMENTS Notice 2018-03 is modified.

## DRAFTING INFORMATION

The principal author of this notice is Bernard P. Harvey of the Office of Associate
Chief Counsel (Income Tax and Accounting). For further information on this notice
contact Bernard P. Harvey on (202) 317-7005 (not a toll-free call).