NEWS

Special Per Diem Rates

October 10, 2017

 

Summary

Cross References
- Notice 2017-54

Each year the IRS updates the special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. These special per diem rates apply to the following:
- 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.

Special M&IE rates for transportation industry. For workers subject to the U.S. Department of Transportation "hours of service" rules, a deduction of 80% for meals is allowed (compared to the general 50% limitation). The "hours of service" rule in general limits the number of hours per day a worker can work. This can include individuals working on an airline, barge, bus, ship, train, or truck.

 

In addition to a higher limit for deducting meals, transportation workers also have their own special standard meal and incidental expense (M&IE) rates:

Effective 10/1/201710/1/2016

M&IE, continental U.S. (CONUS)$63$63

M&IE, outside continental U.S. (OCONUS)$68$68

Rate for incidental expenses only deduction. Rev. Proc. 2011-47 revised the definition of incidental expenses to include only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. These costs may be separately deducted or reimbursed from other travel costs. Effective October 1, 2017, the rate for the incidental expenses only deduction is $5 per day.

 

 

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