IRS Announces Special Per Diem Rates for Business Travelers for 2023-24
The Internal Revenue Service (IRS) publishing special per diem rates for business travelers is an essential step in simplifying the process of reimbursing employees for their expenses while traveling for work. These per diem rates provide taxpayers with a standardized daily allowance to cover lodging, meals, and incidental expenses, reducing the need for extensive recordkeeping and documentation.
The notice issued by the IRS outlines three types of per diem rates:
- Special Transportation Industry Meal and Incidental Expenses (M&IE) Rates: These rates are set at $69 for locations within the continental United States (CONUS) and $74 for locations outside the CONUS. They apply to individuals in the transportation industry who must adhere to federal hours-of-service limits.
- Incidental Expenses Only Deduction Rate: This rate is set at $5 per day, regardless of the travel locale (CONUS or outside the CONUS). It is intended for taxpayers who incur only incidental expenses on a travel day, such as tips and fees for service staff.
- High-Low Substantiation Method: This method simplifies per diem rates for lodging, meals, and incidental expenses when traveling to high-cost localities and other localities within the CONUS. High-cost localities are those with a federal per diem rate of $261 or more. The high-low rates are $309 for high-cost localities and $214 for other localities within the CONUS.
The notice also provides guidance on using these per diem rates in various scenarios, ensuring that taxpayers can apply them accurately based on their specific circumstances.
These standardized per diem rates offer a streamlined approach to expense reimbursement and simplify tax reporting. The IRS’s efforts to update and provide clear guidance on per diem rates benefit both businesses and employees, reducing administrative burdens and ensuring compliance with tax regulations.
Sources: AirGuide Business airguide.info, msn.com, gsa.gov, news.bloomberglaw.com