2020-2021 Special Per Diem Rates

The IRS recently released Notice 2020-71, detailing the new special per diem rates taxpayers use to substantiate necessary business expenses while traveling away from home. The rates will apply to allowances for lodging, meal and incidental expenses or for meal and incidental expenses paid to an employee on or after October 1, 2020.

Three specific categories are addressed in the notice:

  1. Special transportation industry meal and incidental expenses. Rates for taxpayers in the transportation industry remain unchanged from the prior year: $66 for travel within the continental U.S. (CONUS) and $71 for any locality outside the continental U.S. (OCONUS).
  1. Incidental expenses-only deduction. Also remains unchanged from the prior year at $5 per day.
  1. Rates and list of high-cost localities. Rates used for purposes of the high-low substantiation method have changed slightly from the prior year. Special per diem rates are:

High-cost locality - $292

Any other locality within CONUS - $198

The amount treated as paid for meals is:

High-cost locality - $71

Any other locality within CONUS - $60

Taxpayers that use the high-low method must comply with Rev. Proc. 2019-48.

Please contact Schneider Downs if you need further information related to per diem rates.

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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