IRS ISSUES 2019 TO 2020 PER DIEM RATES

December 17, 2019 - Douglas Myser

IRS issues 2019 to 2020 per diem rates. Business travelers who incur expenses while traveling away from home have new per diem rates to use in substantiating certain of those expenses (Notice 2019-55). The new rates are in effect from Oct. 1 2019 to Sept. 30, 2020. The IRS provided the 2019-2020 special per diem rates, including the transportation industry meal and incidental report 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. The updates rates are effective for per diem allowances paid to any employee on or after Oct. 1, 2019, for travel away from home on or after that date, and supercede the rates in Notice 2018-77, which provided the rates for Oct. 1, 2018, through Sept. 30, 2019. IRS issues 2019 to 2020 per diem rates.

Rev. Proc. 2011-47 provides the general rules for using a federal per diem rate to substantiate the amount of ordinary and necessary expenses for lodging, meals, and incidental costs paid or incurred for business related travel away from home. Taxpayers using the rates and the list of localities in Notice 2019-55 must comply with the IRS rules in Rev. Proc. 2011-47. For purposes of 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 United States, slightly higher than last year. The amount of these rates that is treated as paid for meals for purposes of Sec. 274 (n) is $71 for travel to a high cost locality, and $60 for travel to any other locality with the Continental United States, both unchanged from last year. IRS issues 2019 to 2020 per diem rates.

Since 2012, incidental expenses have included only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. The per diem rate for the incidental expenses only deduction remains unchanged at $5 per day for any locality of travel. The special meals and incidental expenses rates for taxpayers in the transportation industry are $66 for any locality of travel within the Continental United States and $71 for any locality of travel outside the Continental United States, both unchanged from last year, after increasing $3 last year.

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