IRS Releases Per-Diem Rates for 2020–2021

Commercial travelers who incur expenditures on transit away from home now have updated per-diem rates to use in authenticating certain of those expenditures. The updated charges effected from October 1, 2020, to September 30, 2021. A few days ago, the IRS released the 2020–2021 distinctive per-diem rates, which included the incidental expenditure rates and transportation industry meal, the rates and list of high-cost neighborhoods for purposes of the high-low and the rate for the incidental-expenses-only deduction substantiation technique.

 

The new rates are operative for per-diem payments given to any worker on or after October 1, 2020, for travel away from home on or after that date, and surpass the rates in Notice 2019-55, which gave rise to the rates for October 1, 2019  through September 30, 2020.

 

Rev. Proc. 2019-48 gives the overall instructions for using a centralized per-diem rate to authenticate the amount of regular and essential expenditures for meals, lodging as well as incidental expenses funded or incurred for commercial-related travel away from home. Taxpayers using the rates and the list of neighborhoods in Notice 2020-71 should observe with the regulations in Rev. Proc. 2019-48.

 

High-low authentication technique

For high-low substantiation method purposes, the per-diem rates are $292 for persons traveling to any high-cost destinations and $198 for those traveling to any other destinations within the continental United States (CONUS), somewhat minimal compared to last year.

 

The sum of these charges that is treated as paid for meals for purposes of Sec. 274(n) is $71 for travel to a high-cost destination and $60 for travel to any other destination within CONUS, equally not changed from last year.

 

The announcement comprises a list of the destinations that are high-cost (localities that have a federal per-diem rate of $245 or more, $3 a bit minimal than last year) for all or section of the calendar year.

 

Incidental expenditures

Beginning 2012, incidental expenditures have incorporated only tips and fees given to caretakers, hotel staff, staff on ships and baggage carriers. The per-diem rate for the incidental-expenses-only will remain deduction unchanged at $5 per day for any area of travel.

Transport industry

The distinctive meals and incidental expenditure rates for taxpayers in the transport industry are $66 for any areas of travel within CONUS and $71 for any areas of travel outside CONUS, which remain unchanged after having been increased to $3 two years ago.