October 16, 2017
On October 16, 2017, the IRS announced the per diem (Latin for "per day")
expense rates for 2017-2018
. The notice includes the special transportation industry rate, 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.
Per diem rates are the fixed amount paid to compensate employees for lodging, meals, and incidental expenses incurred when traveling on business. These rates are used instead of the actual amount paid to reimburse employees for out-of-pockets expenses. Certain unreimbursed expenses may qualify for a deduction on a taxpayer’s federal return.
The special meals and incidental expenses (M&IE) rates for taxpayers in the transportation industry are $63 for travel within the continental U.S. and $68 for anywhere outside the continental U.S. These are the same as last year’s rates. M&IE includes all meals, room service, laundry, dry cleaning, and pressing of clothing, and fees and tips for persons who provide services, such as food servers and luggage handlers.
The rate for the incidental expenses only deduction is $5 per day for any locality within or outside the continental U.S. Incidental expenses include fees and tips paid at lodging, including porters and hotel staff.
For the high-low substantiation method, the per diem rates are $284 for travel to any high-cost locality and $191 for travel to anywhere else within the continental U.S. The M&IE only per diem is $68 (high-cost locality) and $57 for travel to any other locality within the continental U.S.
The notice also provides a list of
, which have a federal per diem rate of $238 for all or a portion of the calendar year.