Blog · 14 October 2026

SIFL Rates July–December 2026: Employer Aircraft Valuation Under Rev. Rul. 2026-18 — What US CPA Firms Should Tell Clients

By Keshav Bansal, CA

SIFL rates 2026 for the second half of the year are set. Rev. Rul. 2026-18, published in Internal Revenue Bulletin 2026-42 (October 13, 2026), updates the Standard Industry Fare Level cents-per-mile rates and the terminal charge used to value personal and other noncommercial flights on employer-provided aircraft from July 1 through December 31, 2026. For US CPA firms with clients who fly employees, executives or guests on company planes, these SIFL rates drive Form W-2 fringe-benefit inclusions under the elective safe harbor in Treas. Reg. §1.61-21(g).

What Rev. Rul. 2026-18 sets for July–December 2026

Per IRB 2026-42 / Rev. Rul. 2026-18 (also summarized by Ed Zollars in Current Federal Tax Developments on October 9, 2026, and covered by Bloomberg Tax on October 13, 2026 and the NBAA), the Department of Transportation calculates the SIFL formula and the IRS publishes the rates semi-annually. For flights during July 1, 2026 – December 31, 2026:

• Terminal charge: $58.95
• 0–500 miles: $0.3225 per mile
• 501–1,500 miles: $0.2459 per mile
• Over 1,500 miles: $0.2364 per mile

The ruling’s formula values a flight as (SIFL cents-per-mile rates × the aircraft multiple under Treas. Reg. §1.61-21(g)(7)) + the terminal charge. Distance is applied in brackets: compute the weighted mileage sum across the applicable brackets, multiply by the aircraft multiple, then add the terminal charge. Kathleen Edmondson, IRS Associate Chief Counsel (Employee Benefits, Exempt Organizations and Employment Taxes), is the principal author noted in CFTD coverage.

For contrast only, first-half 2026 rates under Rev. Rul. 2026-8 (IRB 2026-16) were: period January 1–June 30, 2026; terminal charge $54.48; and $0.2980 / $0.2272 / $0.2184 for the same three mileage brackets. Second-half rates are higher across the board.

How SIFL fits under §61 and the aircraft multiple

Under IRC §61, noncash perks are income. Employers may value personal use of employer aircraft under the elective SIFL safe harbor in Treas. Reg. §1.61-21(g) instead of charter fair market value under §1.61-21(b). Control employees face higher aircraft multiples under §1.61-21(g)(7)—up to 400% for the heaviest aircraft / control-employee combinations, as covered.md and CFTD note in general terms. Guests and family members on the flight are counted in the valuation as well.

Hypothetical arithmetic illustration (not from the ruling): Assume a 400-mile noncommercial flight valued under the July–December 2026 rates with an assumed aircraft multiple of 200%. Mileage component = 400 × $0.3225 = $129.00; after the 200% multiple = $258.00; plus terminal charge $58.95 = $316.95 of imputed income for that passenger under those assumptions. Change the multiple, distance bracket mix or passenger count and the result changes. Do not treat this figure as an IRS example.

W-2 reporting, payroll timing and §274

• Form W-2. The includible amount generally goes in Boxes 1, 3 and 5 (and Box 14 if the firm uses it for fringe detail). Guests and family on the aircraft are part of the count that drives the inclusion.
• Special accounting. Announcement 85-113’s special accounting rules for noncash fringes (noted in CFTD) can help employers time when noncash aircraft benefits are treated as paid for withholding and deposit purposes—confirm the current announcement and payroll calendar before year-end.
• §274 is separate. Valuing the flight for income inclusion does not override deduction disallowance for entertainment use of aircraft by specified individuals under §274(e)(2) / §274(o), as CFTD emphasizes. Income inclusion and employer deduction are different questions.

Firms already updating mileage workpapers for the mid-year standard mileage rates 2026 change can use the same calendar reminder for SIFL: rates flip on July 1 and January 1. Household employment and other fringe files—such as the nanny tax / household employment taxes 2026 checklist—remain separate from aircraft SIFL, but both belong on a year-end fringe organizer.

What US CPA firms should tell clients

• Confirm the valuation method. SIFL is elective. If the employer uses charter FMV under §1.61-21(b) instead, these cents-per-mile tables do not apply.
• Match the period. Use Rev. Rul. 2026-18 for flights July 1–December 31, 2026; use Rev. Rul. 2026-8 for January 1–June 30, 2026.
• Document distance and brackets. Apply the three mileage brackets to the flight path; do not flatten the whole trip into one rate.
• Apply the correct aircraft multiple. Control-employee status and aircraft weight class under §1.61-21(g)(7) can raise the multiple substantially (up to 400% in the heaviest control-employee cases). Do not invent a multiple table—pull the regulation.
• Coordinate W-2 and withholding. Build the inclusion into year-end W-2 processing and, where used, Announcement 85-113 special accounting. Draft 2027 Form W-4 conversations are a natural time to ask whether aircraft fringes are already in the withholding plan.
• Separate deduction analysis. Tell clients that putting value on the W-2 does not automatically salvage a §274 entertainment-aircraft deduction for specified individuals.

A short firm checklist for second-half 2026 flights

• Add employer-aircraft / personal-flight questions to the organizer (dates, destinations, passenger list, control-employee status, aircraft type/weight class, valuation method).
• Refresh the SIFL rate card to Rev. Rul. 2026-18 for any flight on or after July 1, 2026.
• Recompute second-half flights that were provisionally valued on first-half rates.
• Flag entertainment / specified-individual flights for a parallel §274 review—not only §61 inclusion.
• Align payroll cutoff and W-2 Box 1/3/5 (and optional Box 14) mapping before Forms W-2 are locked.

Where this fits for Tax Brew readers

Employer aircraft shows up in closely held and executive-comp files more often than many organizers admit. The SIFL math is mechanical once the rates, brackets and multiple are correct; the risk is a flight that never made it onto the fringe checklist, or a §274 disallowance that was ignored because “we already put it on the W-2.”

Below-market family loans and other year-end rate updates—see AFR rates October 2026 and below-market family loans—belong on the same seasonal calendar. If fringe workpapers, W-2 reconciliations or aircraft logs are stretching your team, outsourced tax prep and bookkeeping support for US CPA firms can take the data gathering and draft schedules while your signing professionals keep the judgment calls. Email info@taxbrewglobal.com.

Check current IRS guidance: this article summarizes Rev. Rul. 2026-18 (IRB 2026-42, October 13, 2026; irs.gov/irb/2026-42_irb), first-half contrast from Rev. Rul. 2026-8 (IRB 2026-16), and general §61 / §1.61-21 / §274 points as described in Ed Zollars, Current Federal Tax Developments (October 9, 2026), Bloomberg Tax (October 13, 2026) and NBAA coverage. SIFL rates change semi-annually. Confirm the current rates, aircraft multiples and Code text before advising clients. This is general information, not tax or legal advice. Sources as of 14 October 2026.