The Internal Revenue Service (IRS) has issued Revenue Ruling 2025-20 to provide the updated terminal charge and Standard Industry Fare Level (SIFL) mileage rates for valuing noncommercial flights on employer-provided aircraft. This guidance is crucial for tax professionals advising clients on the taxation of fringe benefits under section 61 of the Internal Revenue Code. The Department of Transportation (DOT) calculates these rates, which are reviewed on a semi-annual basis, necessitating periodic updates from the IRS.

Valuation of Noncommercial Flights

Under §1.61-21(g) of the Income Tax Regulations, a specific rule is provided for valuing noncommercial flights on aircraft provided by an employer. This rule, commonly known as the SIFL formula or the base aircraft valuation formula, is detailed in §1.61-21(g)(5). The purpose of this formula is to determine the value of the flight, which is then included in the employee’s gross income as a taxable fringe benefit under Internal Revenue Code §61.

The SIFL Formula

The computation of the flight’s value involves a multi-step process outlined in the regulations. The value is determined by multiplying the applicable SIFL cents-per-mile rate for the period by the appropriate aircraft multiple from §1.61-21(g)(7), and then adding the applicable terminal charge. Tax practitioners must ensure they are using the correct aircraft multiple as specified in the regulations and the SIFL rates and terminal charge applicable to the period in which the flight was taken.

Period and Rates Covered by Revenue Ruling 2025-20

This revenue ruling specifically addresses flights taken during the second half of 2025. The rates announced are effective for the period from July 1, 2025, through December 31, 2025. For this six-month period, the DOT has calculated the following rates:

Terminal Charge: $53.62.
SIFL Mileage Rates:
- $0.2933 per mile for flights up to 500 miles.
- $0.2237 per mile for flights between 501 and 1500 miles.
- $0.2150 per mile for flights over 1500 miles.

For additional information regarding this ruling, practitioners may contact Kathleen Edmondson of the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations and Employment Taxes) at (202) 317-6798.

Prepared with assistance from NotebookLM.