IRS updates per diem rates for lodging and meal expenses when traveling

By Michael Cohn

September 25, 2019, 6:09 p.m. EDT

The Internal Revenue Service issued new per diem rates Wednesday, Sept. 25, for business travelers to use for lodging, meals and incidental expenses, effective Oct. 1, 2019.

Notice 2019-55 provides the annual update to the rates that taxpayers can use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home. The notice also 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.

Use of a per diem substantiation method isn’t mandatory, the IRS noted. Taxpayers can substantiate the actual allowable expenses if they maintain adequate records or other sufficient evidence for proper substantiation.

The special meals and incidental expenses rates for taxpayers in the transportation industry are $66 for any locality in the continental United States and $71 for outside the continental U.S. The rate for the incidental expenses only deduction is $5 per day inside or outside the U.S. For the high-low substantiation method, the per diem rates are $297 for travel to any high-cost locality and $200 for travel to any other locality within the Continental U.S.. The amount of the $297 high rate and $200 low rate that’s treated as paid for meals is $71 for travel to any high-cost locality and $60 for travel to any other locality within the continental U.S. The per diem rates in lieu of the rates for the meal and incidental expenses only substantiation method are $71 for travel to any high-cost locality, and $60 for travel to any other locality within the continental U.S. High-cost localities have a federal per diem rate of $248 or more.