The special per diem rates by which taxpayers can justify ordinary and necessary business expenses for travel away from home will be slightly higher starting Oct. 1, the IRS announced Monday in Notice 2022-44.
Generally, instead of the actual accommodation, meal, and incidental expenses incurred, a payer may consider as justified for federal tax purposes an employee’s expenses incurred for work-related travel. an amount equal to or equal to the federal daily rate for the locality of travel. . The high-low justification method applies a higher rate to designated high-cost locations and a lower rate to all other locations.
The annual update includes the daily rate under the high-low substantiation method for travel within the Continental United States (CONUS), which for non-cost locations will be $204. The fare for travel to high-cost locations within CONUS, which are listed in the notice, is $297. These current rates for the period from October 1, 2021 to September 30, 2022 are $202 and $296, respectively. The part of the tariffs considered paid for meals for the purposes of art. 274(n) is $74 for high-cost CONUS localities and $64 for all other CONUS localities, both as currently.
The notice also revises the list of high-cost locations for the new upcoming annual period (October 1, 2022 to September 30, 2023) for which the new rates are in effect. High-cost localities have a federal daily rate of $250 or more.
Notice 2022-44 also provides special rates for taxpayers in the transportation industry. The rates for meals and incidentals are $69 for any travel location within CONUS and $74 for travel locations outside of CONUS, both of which are the same as now.
The rate for incidentals only remains at $5 per day as it is now, for travel inside and outside the CONUS.
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