Pass it along to A/P: There are new IRS per diem rates for business travelers, effective Oct. 1, 2023 through Sept. 30, 2024.
Notice 2023-68 announced the special IRS per diem rates, which you can use to substantiate the amount of expenses for lodging and meals and incidental expenses (M&IE) for your road warriors.
While not mandatory, many employers prefer a per diem payment approach to T&E instead of tallying up and reimbursing actual expenses based on employee-submitted records and receipts, and keeping records of all those allowable expenses.
Important IRS per diem numbers
Inflation strikes again. For the purposes of the high-low substantiation method, the new IRS per diem rates are:
- $309 when traveling to any high-cost locality (currently $297), and
- $214 for travel to any other locality within the continental U.S. (CONUS) (a $10 increase over the current rate).
However, M&IE per diems will hold steady for the next year:
- $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 IRS per diem rate for incidental-expenses-only deductions remains $5 for all areas.
There’s also the option to use the federal per diem rates published annually by the U.S. General Services Administration, which we reported earlier. IRS Rev. Proc. 2019-48 provides the complete rules for using per diem rates.
High-cost localities: Who’s in, who’s out?
As of Oct. 1, the following areas have been added to the list of high-cost localities:
- Yosemite National Park, CA
- Tampa/St. Petersburg, FL
- Missoula, MT
- Saratoga Springs/Schenectady, NY
- Eugene/Florence, OR, and
- Montpelier, VT.
Here are the part-time high-cost locality changes to note:
- San Diego (year-round)
- Washington D.C., including the cities of Alexandria, Falls Church and Fairfax, and Arlington and Fairfax counties in Virginia; and Montgomery and Prince George’s counties in Maryland (Oct. 31-June 30 and Sept. 1-30)
- Fort Lauderdale, FL (Jan. 1-April 30)
- Fort Myers, FL (Dec. 1-March 31)
- Fort Walton Beach/DeFuniak Springs, FL (June 1-July 31)
- Miami, FL (Dec. 1-May 31)
- Vero Beach, FL (year-round)
- Portland, ME (Oct. 1-31 and July 1-Sept. 30)
- Hilton Head, SC (March 1-Aug. 31)
- Manchester, VT (Oct. 1-31 and Aug. 1-Sept. 30), and
- Seattle (Oct. 1-31 and May 1-Sept. 30).
As of Oct. 1, the following cities drop off the list and become regular CONUS localities:
- Los Angeles
- Durango, CO
- Portland, OR, and
- Vancouver, WA.