IRS Issues Special Per Diem Rates for 2017-2018
Rates Effective On or After October 1, 2017
The Internal Revenue Service (IRS) has released an annual notice that provides the 2017-2018 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. The rates are effective for allowances paid to employees on or after October 1, 2017 for travel on or after October 1, 2017.
2017-2018 Rates
The 2017-2018 per diem rates are as follows:
- The special meal and incidental expenses rates for taxpayers in the transportation industry are $63 for any locality of travel in the continental United States (CONUS) and $68 for any locality of travel outside the continental United States (OCONUS);
- The rate for any CONUS or OCONUS locality of travel for the incidental expenses only deduction is $5 per day;
- The rates for the high-low substantiation method are $284 for travel to any high-cost locality and $191 for travel to any other locality within CONUS;
- The amount of the $284 high rate and $191 low rate that is treated as paid for meals (for purposes of Internal Revenue Code §274(n)) is $68 for travel to any high-cost locality and $57 for travel to any other locality within CONUS;
- The per diem rates in lieu of the rates described in Notice 2016-58 regarding the meal and incidental expenses only substantiation method are $68 for travel to any high-cost locality and $57 for travel to any other locality within CONUS; and
- The localities listed in section 5 of the annual notice have a federal per diem rate of $238 or more, and are high-cost localities for all of the calendar year or the portion of the calendar year specified in parentheses under the key city name.
Effective Date
The annual notice is effective for per diem allowances for lodging, meal, and incidental expenses, or for meal and incidental expenses only, that are paid to any employee on or after October 1, 2017, for travel away from home on or after October 1, 2017. For purposes of computing the amount allowable as a deduction for travel away from home, the annual notice is effective for meal and incidental expenses or for incidental expenses only paid or incurred on or after October 1, 2017.
