The Internal Revenue Service (IRS) recently issued its annual update of per-diem rates for individuals incurring expenses while traveling away from home for business. The new notice specifically concerns special per-diem rates, including the:

  • Transportation industry meal and incidental expenses rate (M&IE),
  • Rate for the incidental-expenses-only deduction and
  • Rates and list of high-cost localities for use of the high-low substantiation method.

The rates apply to per-diem allowances paid to employees traveling for business between Oct. 1, 2021, and Sept. 30, 2022.

Transportation Industry M&IE Rate

The M&IE rate for individuals in the transportation industry is $69 for any locality of travel within the continental U.S. and $74 for any locality of travel outside the continental U.S. Both rates are up $3 from last year’s amounts.

Incidental Expenses

The incident-expenses-only deduction remains the same as last year at $5 per day for any locality of travel.

High-Low Substantiation Method

The notice also contains an updated list of high-cost localities, or those with a per-diem rate greater than $249, which is $4 higher than last year. Concerning the high-low substantiation method, the per-diem rates are $296 for travel to high-cost localities and $202 for travel to any other localities within the continental U.S., both up $4 from last year. The portion of these rates intended for meals is $74 for high-cost localities and $64 for any other localities within the continental U.S., up $3 and $4, respectively.

If you have questions about per-diem rates within your organization, contact Doeren Mayhew’s business tax advisors today.