2019 per diem rates issued for travel expense reimbursements

The IRS has provided the 2018-2019 special per diem rates for taxpayers to use to substantiate ordinary and necessary business expenses incurred while traveling away from home. The guidance provides the special transportation industry meal and incidental expenses (M&IE) rates, 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. Taxpayers using the rates and list of high-cost localities provided must comply with Rev. Proc. 2011-47, IRB 2011-42, 520.

Transportation industry rates

The special M&IE rates for taxpayers in the transportation industry are $66 for any locality of travel in the continental United States (CONUS) and $71 for any locality of travel outside the continental United States (OCONUS).

Incidental expense only rate

The rate for any CONUS or OCONUS locality of travel for the incidental expenses only deduction is $5 per day.

High-low substantiation method

For purposes of the high-low substantiation method, the per diem rates are $287 for travel to any high-cost locality and $195 for travel to any other locality within CONUS. The amount of the $287 high rate and $195 low rate that is treated as paid for meals is $71 for travel to any high-cost locality and $60 for travel to any other locality within CONUS. The per diem rates in lieu of the M&IE only substantiation method are $71 for travel to any high-cost locality and $60 for travel to any other locality within CONUS.

High-cost localities changes

The following localities have been added to the list of high-cost localities: Sedona, Arizona; Los Angeles, California; San Diego, California; Vero Beach, Florida; Jekyll Island/Brunswick, Georgia; Duluth, Minnesota; Pecos, Texas; Moab, Utah; Cody, Wyoming.

The following localities have changed the portion of the year in which they are high-cost localities: Oakland, California; Aspen, Colorado; Boca Raton/Delray Beach/Jupiter, Florida; Naples, Florida; Bar Harbor/Rockport, Maine; Boston/Cambridge, Massachusetts; Jamestown/Middletown/Newport, Rhode Island; Charleston, South Carolina; Vancouver, Washington; Jackson/Pinedale, Wyoming.

The following localities have been removed from the list of high-cost localities: Mill Valley/San Rafael/ Novato, California; Steamboat Springs, Colorado; Petoskey, Michigan; Saratoga Springs/Schenectady, New York.

The following localities have been redefined: Traverse City, Michigan no longer includes Leland; Bar Harbor, Maine now includes Rockport.

Effective date

The notice is effective for per diem allowances for lodging, meal and incidental expenses, or for meal and incidental expenses only, that are paid to any employee on or after October 1, 2018, for travel away from home on or after October 1, 2018. For purposes of computing the amount allowable as a deduction for travel away from home, the notice is effective for meal and incidental expenses or for incidental expenses only paid or incurred on or after October 1, 2018. IRS Notice 2017-54, is superseded.

The list below has a federal per diem rate of $241 or more, and are high-cost localities for all of the calendar year or the portion of the calendar year specified in parentheses under the key city name. (IRS Notice 2018-77, IRB 2018-42, dated October 10, 2018.)

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