Special Per Diem Rates Updated for 2013-2014 (Notice 2013-65)

The IRS has provided the 2013-2014 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 rates (M&IE), 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, I.R.B. 2011-42, 520.

Transportation Industry Rates

The special M&IE rates for taxpayers in the transportation industry are $59 for any locality of travel in the continental United States (CONUS) and $65 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 $251 for travel to any high-cost locality and $170 for travel to any other locality within CONUS. The amount of the $251 high rate and $170 low rate that is treated as paid for meals is $65 for travel to any high-cost locality and $52 for travel to any other locality within CONUS. The per diem rates in lieu of the meal and incidental expenses only substantiation method are $65 for travel to any high-cost locality and $52 for travel to any other locality within CONUS.

High-Cost Localities Changes

Santa Cruz, California; Boca Raton/Delray Beach/Jupiter, Florida; Charleston, South Carolina; and Midland, Texas, have been added to the list of high-cost localities appearing in Notice 2012-63, I.R.B. 2012-42, 496. The portion of the year in which they are high-cost localities has changed for Monterey, California; Telluride, Colorado; Miami, Florida; Chicago, Illinois; and Park City, Utah. No localities have been removed from the list of high-cost localities.

Effective Date

This guidance 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, 2013, for travel away from home on or after October 1, 2013. For purposes of computing the amount allowable as a deduction for travel away from home, this guidance is effective for meal and incidental expenses or for incidental expenses only paid or incurred on or after October 1, 2013.

Notice 2012-63, I.R.B. 2012-42, 496, is superseded.

Notice 2013-65, 2013FED ¶46,529

Other References:

Code Sec. 162

CCH Reference – 2013FED ¶180.01

CCH Reference – 2013FED ¶1070.11

CCH Reference – 2013FED ¶8856.17

Code Sec. 274

CCH Reference – 2013FED ¶14,417.002

CCH Reference – 2013FED ¶14,417.035

CCH Reference – 2013FED ¶14,417.037

CCH Reference – 2013FED ¶14,417.038

CCH Reference – 2013FED ¶14,417.04

CCH Reference – 2013FED ¶14,417.421

Tax Research Consultant

CCH Reference – TRC BUSEXP: 24,808

CCH Reference – TRC BUSEXP: 24,912.05

CCH Reference – TRC BUSEXP: 24,912.15

 

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