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Per Diem Rates for Post September 30 Travel

10.06.2015

airplane, commercial airline, terminal, flyingThe IRS has announced the simplified per diem rates that taxpayers can use to reimburse employees for expenses incurred during travel after September 30, 2015. The high-cost area per diem increases to $275 and the low-cost area per diem increases to $185, the IRS reported.

Rates

The IRS provides optional per diem allowances, in lieu of substantiating actual travel-related meal and lodging costs, which employers and employees are deemed to have substantiated by adequate records or other sufficient evidence. The per diem amounts also satisfy the requirement that employees provide an adequate accounting to the employer of meal and lodging expenses.

The IRS-approved per diem rate for high-cost areas is $275. The IRS-approved per diem rate for all other areas is $185. The rates apply to per diem allowances paid for travel after September 30, 2015.

Incidental expenses

The IRS explained that the term "incidental expenses" has the same meaning as in the federal travel regulations. Federal travel regulations describe incidental expenses as fees and tips given to porters, baggage carriers, bellhops, hotel maids, stewards or stewardesses and others on ships. Transportation between places of lodging or business and places where meals are taken, and the mailing cost associated with filing travel vouchers and payment of employer-sponsored charge card billings are excluded from the GSA definition of incidental expenses. The rate for the incidental-expenses-only deduction is $5 per day for post-September 30, 2015 travel.

Transportation industry

The special transportation industry meals and incidental expense rate for taxpayers in the transportation industry is $63 for any locality of travel in the continental United States. The special transportation industry M&IE expense rate is $68 for any locality of travel outside the continental United States.

Effective date

Notice 2015-63 is effective for per diem allowances for lodging, meal and incidental expenses, or for meal and incidental expenses only, paid to any employee on or after October 1, 2015, for travel away from home on or after October 1, 2015. For purposes of computing the amount allowable as a deduction for travel away from home, Notice 2015-63 is effective for meal and incidental expenses or for incidental expenses only paid or incurred on or after October 1, 2015.

Roy H. Kramer, CPA/PFS, CDFA, CDS, NSSAIf you have any questions about estimated income tax, contact your tax advisor or Roy Kramer, Partner, Tax Services, at 314.983.1265 or rkramer@bswllc.com.

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