IRS Revenue Ruling 2026-18 Sets SIFL Rates and Terminal Charge for Employer-Provided Aircraft Flights in Second Half of 2026
Why It MattersSemi-annual SIFL updates keep imputed-income calculations for executive aircraft use tied to DOT-derived cost data, forcing payroll and tax teams to recheck withholding every six months rather than treat valuations as fixed.
What happened
The Internal Revenue Service has issued Revenue Ruling 2026-18, establishing the Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charge used to value noncommercial flights on employer-provided aircraft taken between July 1, 2026, and December 31, 2026. The ruling operates under Internal Revenue Code Section 61 and Treasury Regulation Section 1.61-21(g), which lets employers use the SIFL formula as a safe-harbor method to determine the fair market value of personal flights on corporate aircraft that must be included in an employee's gross income.
For the second half of 2026, the ruling sets the terminal charge at $58.95, the SIFL mileage rate for the first 500 miles at $0.3225 per mile, the rate for miles 501 through 1,500 at $0.2459 per mile, and the rate for miles over 1,500 at $0.2364 per mile. The value of a flight is calculated by multiplying the applicable SIFL cents-per-mile rates by the aircraft multiple set out in Treasury Regulation Section 1.61-21(g)(7) — which depends on whether the passenger is a control employee or non-control employee and on the aircraft's maximum certified takeoff weight — and then adding the terminal charge. The resulting value governs federal income tax inclusion, federal income tax withholding, and FICA/FUTA obligations.
The SIFL mileage rates are calculated by the Department of Transportation and reviewed semi-annually. These particular rates apply strictly to flights taken between July 1, 2026, and December 31, 2026; flights taken during the first half of 2026 are governed by the prior semi-annual revenue ruling. The principal author of Revenue Ruling 2026-18 is Kathleen Edmondson of the IRS Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations and Employment Taxes).
Deduction limits remain separate
Practitioners are reminded that valuing a flight under the SIFL rules for income inclusion under I.R.C. § 61 does not override deduction disallowance provisions under I.R.C. § 274(e)(2) or § 274(o) regarding corporate deductions for entertainment aircraft usage. Employers making SIFL adjustments must ensure proper imputation on Form W-2.
Industry impact & what to watch
This ruling belongs to a recurring compliance cycle: every six months the DOT recalculates the cost inputs behind SIFL, and the IRS republishes them as a revenue ruling so that corporate flight departments and payroll teams have a fixed safe-harbor rate for the period. Because the mileage bands and terminal charge shift each cycle, a flight valued one way in the first half of 2026 is valued differently once the new figures take effect on July 1.
For employers running executive travel on company aircraft, the practical work is mechanical but recurring: recompute imputed income using the control-employee or non-control-employee aircraft multiple, apply the correct mileage band, add the new terminal charge, and route the result through W-2 withholding and FICA/FUTA calculations before year-end filings. The separate deduction limits under I.R.C. § 274(e)(2) and § 274(o) are not affected by this valuation update, so flight departments still need to track income inclusion and deduction disallowance as two distinct exercises.
The next dated milestone is the IRS's first-half-2027 revenue ruling, which will reset these same four figures based on updated DOT data and determine how flights taken from January 1, 2027 onward must be valued.
