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New IRS per diem rates for 2018-2019 were recently announced, effective from October 1, 2018, through September 30, 2019. These rates impact business travelers who incur expenses on the road and include incidental expenses and transportation industry meal rates, as well as rates for incidental-expenses-only deductions. The rates and list of high-cost localities for purposes of the high-low substantiation method have also been updated.
The special meals and incidental expenses rates for transportation industry taxpayers have increased by $3 each from last year to:
- $66 for travel within the continental United States, and
- $71 for anywhere outside the continental U.S.
The incidental-expenses-only deduction per diem rate is unchanged at $5 per day, regardless of locality. These expenses include fees and tips for hotel staff, staff on ships, and baggage carriers.
There are special rates for certain destinations, due to the varying travel costs depending on the location. Using the high-low substantiation method, the per diem rates are a few dollars higher than last year’s rates, with a $287 rate for travel to any high-cost locality and $195 for travel to any other locality within the continental United States. The per diem rates for meals & incidental expenses only has increased to $71 for travel to a high-cost locality and to $60 for travel to any other locality within the continental United States. The list of high-cost cities can be found on page 3 of the IRS Notice. These localities’ federal per diem rate has increased to $241 or more.
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