The IRS has updated the rules for using per diem rates to substantiate the amount of business expenses paid or incurred while traveling away from home. The full notice from the IRS can be viewed here.
Highlights include the following:
- $66 for any travel locality within the continental United States and $71 for any travel locale outside the continental U.S. for special meal and incidental expenses rates for taxpayers in the transportation industry.
- $5 per day for any locality of travel within or outside the U.S. for the incidental expenses only deduction
- For purposes of the high-low substantiation method, the per diem rates in lieu of the rates in last year’s Notice 2019-55 are $292 for travel to any high-cost locality and $198 for travel to any other locality within the continental U.S.
- The amount of the $292 high rate and $198 low rate that’s treated as paid for meals for purposes of Section 274(n) is $71 for travel to any high-cost locality and $60 for travel to any other U.S. locality.
- The per diem rates for the meal and incidental-expenses-only substantiation method are $71 for travel to any high-cost locale and $60 for travel to any other locale within the continental U.S.
- For high-cost localities, the notice provides a table showing which counties have a federal per diem rate of $245 or more, and are high-cost localities for specific parts of the year.
Notably, Virginia Beach has been added to the list of high-cost localities.