WASHINGTON — The Internal Revenue Service has announced special per diem rates that can be used to substantiate the amount of business expenses incurred for travel away from home on or after Oct. 1.
Specifically, the special transportation industry meal and incidental expenses (M&IE) rates, the rate for the incidental expenses only deduction and the rates and list of high-cost localities for purposes of the high-low substantiation method, according to the IRS.
Employers using these rates to set per diem allowances can treat certain categories of travel expenses as substantiated without requiring that employees prove the actual amount they spent.
The amount deemed substantiated will be the lesser of the allowance actually paid or the applicable per diem rate for the same set of expenses. This notice, which replaces IRS Notice 2023-68, announces rates and the list of high-cost localities for use under the optional high-low substantiation method, special rates for transportation industry employers, and the rate for taxpayers taking a deduction only for incidental expenses. General guidance issued in 2019 regarding the use of per diems after the Tax Cuts and Jobs Act remains in effect.
To read the IRS notice in full, click here.
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
