Alert your A/P team: IRS has new special per diem rates for business travelers, effective Oct. 1, 2022, through Sept. 30, 2023.
Notice 2022-44 lists the new rates, which you can use to substantiate the amount of expenses for lodging and meals and incidental expenses (M&IE) for your road warriors, instead of reimbursing actual travel expenses based on your employees’ records and receipts.
The latest per diem numbers
If you streamline your T&E process by using the high-low substantiation method, the new per diem rates are:
- $297 when traveling to any high-cost locality (currently $296), and
- $204 for travel to any other locality within the continental U.S. (CONUS) (a $2 increase over the current rate).
Good news for A/P staffers in charge of T&E: they don’t have to memorize new high-low substantiation method specific rates for M&IE per diems. They remain the same at:
- $74 for high-cost localities, and
- $64 for any other locality within CONUS.
Also staying the same are the special per diem rates for companies in the transportation industry: $69 for any area within CONUS and $74 for areas outside of CONUS.
The rate for incidental expenses remains $5 a day for all areas.
Many new high-cost localities
A/P will need to start paying closer attention to where your business travelers are going because IRS has made a notable number of changes to its list of high-cost localities.
The following will officially become high-cost localities as of Oct. 1:
- Gulf Shores, AL
- Phoenix/Scottsdale, AZ
- San Luis Obispo, CA
- Durango, CO
- Steamboat Springs, CO
- Bradenton, FL
- Cocoa Beach, FL
- Gulf Breeze, FL
- Panama City, FL
- Pensacola, FL
- Punta Gorda, FL
- Sarasota, FL
- Sebring, FL
- Stuart, FL
- Sun Valley/Ketchum, ID
- Portland, ME
- Mackinac Island, MI
- Duluth, MN
- Kalispell/Whitefish, MT
- Toms River, NJ
- Glens Falls, NY
- Kill Devil Hills, NC
- Lincoln City, OR
- Myrtle Beach, SC
- Moab, UT
- Manchester, VT, and
- Port Angeles/Port Townsend, WA.
Not all high-cost localities are full-time, however. These cities are getting changes to the portion of the calendar year when they’re officially high-cost localities:
- Sedona, AZ (year-round)
- Napa, CA (year-round)
- San Diego (Feb. 1-Aug. 31)
- Silverthorne/Breckenridge, CO (Oct. 1-March 31 and June 1-Sept. 30)
- Fort Lauderdale, FL (Oct. 1-April 30)
- Fort Walton Beach/De Funiak Springs, FL (Oct. 1-31 and March 1-Sept. 30)
- Key West, FL (year-round)
- Bar Harbor/Rockport, ME (Oct. 1-31 and July 1-Sept. 30)
- Falmouth, MA (May 1-Aug. 31)
- Martha’s Vineyard, MA (year-round)
- Nantucket, MA (year-round)
- Jamestown/Middleton/Newport, RI (Oct. 1-31 and June 1-Sept. 30)
- Charleston, SC (year-round)
- Park City, UT (year-round), and
- Jackson/Pinedale, WY (year-round).
Crested Butte/Gunnison, CO is being removed from the list of high-cost localities.