IRS Publishes Special Per Diem Rates for 2018-2019
Notice 2018-77; 2018-42 IRB 601
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Areas/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2018-38638
- Tax Analysts Electronic Citation2018 TNT 188-172018 TPR 40-7
Superseded by Notice 2019-55
Supersedes Notice 2017-54
2018-2019 Special Per Diem Rates
SECTION 1. PURPOSE
This annual notice provides the 2018-2019 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically (1) the special transportation industry meal and incidental expenses (M&IE) rates, (2) the rate for the incidental expenses only deduction, and (3) the rates and list of high-cost localities for purposes of the high-low substantiation method.
SECTION 2. BACKGROUND
Rev. Proc. 2011-47, 2011-42 I.R.B. 520 (or successor), provides rules for using a per diem rate to substantiate, under § 274(d) of the Internal Revenue Code and § 1.274-5 of the Income Tax Regulations, the amount of ordinary and necessary business expenses paid or incurred while traveling away from home. Taxpayers using the rates and list of high-cost localities provided in this notice must comply with Rev. Proc. 2011-47 (or successor). Notice 2017-54, 2017-42 I.R.B. 321, provides the rates and list of high-cost localities for the period October 1, 2017, to September 30, 2018.
Section 3.02(3) of Rev. Proc. 2011-47 (or successor) provides that the term “incidental expenses” has the same meaning as in the Federal Travel Regulations, 41 C.F.R. 300-3.1, and that future changes to the definition of incidental expenses in the Federal Travel Regulations would be announced in the annual per diem notice. Subsequent to the publication of Rev. Proc. 2011-47, the General Services Administration published final regulations revising the definition of incidental expenses under the Federal Travel Regulations to include only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Transportation between places of lodging or business and places where meals are taken, and the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings, are no longer included in incidental expenses. Accordingly, taxpayers using the per diem rates may separately deduct, if permitted, or be reimbursed for transportation and mailing expenses.
SECTION 3. SPECIAL M&IE RATES FOR TRANSPORTATION INDUSTRY
The special M&IE rates for taxpayers in the transportation industry are $66 for any locality of travel in the continental United States (CONUS) and $71 for any locality of travel outside the continental United States (OCONUS). See section 4.04 of Rev. Proc. 2011-47 (or successor).
SECTION 4. RATE FOR INCIDENTAL EXPENSES ONLY DEDUCTION
The rate for any CONUS or OCONUS locality of travel for the incidental expenses only deduction is $5 per day. See section 4.05 of Rev. Proc. 2011-47 (or successor).
SECTION 5. HIGH-LOW SUBSTANTIATION METHOD
1. Annual high-low rates. For purposes of the high-low substantiation method, the per diem rates in lieu of the rates described in Notice 2017-54 (the per diem substantiation method) are $287 for travel to any high-cost locality and $195 for travel to any other locality within CONUS. The amount of the $287 high rate and $195 low rate that is treated as paid for meals for purposes of § 274(n) is $71 for travel to any high-cost locality and $60 for travel to any other locality within CONUS. See section 5.02 of Rev. Proc. 2011-47 (or successor). The per diem rates in lieu of the rates described in Notice 2017-54 (the meal and incidental expenses only substantiation method) are $71 for travel to any high-cost locality and $60 for travel to any other locality within CONUS.
2. High-cost localities. The following localities have a federal per diem rate of $241 or more, and are high-cost localities for all of the calendar year or the portion of the calendar year specified in parentheses under the key city name.
Key city | County or other defined location |
---|---|
Arizona |
|
Sedona | City Limits of Sedona |
California |
|
Los Angeles (October 1-October 31 and January 1-September 30) | Los Angeles, Orange, Ventura, Edwards AFB less the city of Santa Monica |
Monterey (July 1-August 31) | Monterey |
Napa (October 1-October 31 and May 1-September 30) | Napa |
Oakland | Alameda |
San Diego (January 1-July 31) | San Diego |
San Francisco | San Francisco |
San Mateo/Foster City/Belmont | San Mateo |
Santa Barbara | Santa Barbara |
Santa Monica | City limits of Santa Monica |
Sunnyvale/Palo Alto/San Jose | Santa Clara |
Colorado |
|
Aspen (October 1-March 31 and June 1-September 30) | Pitkin |
Denver/Aurora | Denver, Adams, Arapahoe, and Jefferson Grand |
Grand Lake (December 1-March 31) |
|
Silverthorne/Breckenridge (December 1-March 31) | Summit |
Telluride | San Miguel |
Vail (December 1-March 31 and July 1-August 31) | Eagle |
Delaware |
|
Lewes (July 1-August 31) | Sussex |
District of Columbia |
|
Washington D.C. (also the cities of Alexandria, Falls Church, and Fairfax, and the counties of Arlington and Fairfax, in Virginia; and the counties of Montgomery and Prince George's in Maryland) (See also Maryland and Virginia) |
|
Florida |
|
Boca Raton/Delray Beach/Jupiter (December 1-April 30) | Palm Beach and Hendry |
Fort Lauderdale (January 1-April 30) | Broward |
Fort Meyers (February 1-March 31) | Lee |
Fort Walton Beach/De Funiak Springs (June 1-July 31) | Okaloosa and Walton |
Key West | Monroe |
Miami (December 1-March 31) | Miami-Dade |
Naples (February 1-April 30) | Collier |
Vero Beach (December 1-April 30) | Indian River |
Georgia |
|
Jekyll Island/Brunswick (March 1-July 31) | Glynn |
Illinois |
|
Chicago (October 1-November 30 and April 1-September 30) | Cook and Lake |
Maine |
|
Bar Harbor/Rockport (July 1-August 31) | Hancock and Knox |
Maryland |
|
Ocean City (July 1-August 31) | Worcester |
Washington, DC Metro Area | Montgomery and Prince George’s |
Massachusetts |
|
Boston/Cambridge (October 1-November 30 and March 1-September 30) | Suffolk, City of Cambridge |
Falmouth (July 1-August 31) | City limits of Falmouth |
Hyannis (July 1-August 31) | Barnstable less the city of Falmouth |
Martha's Vineyard (June 1-September 30) | Duke |
Nantucket (June 1-September 30) | Nantucket |
Michigan |
|
Traverse City (July 1-August 31) | Grand Traverse |
Minnesota |
|
Duluth (June 1-August 31) | St. Louis |
New York |
|
Lake Placid (July 1-August 31) | Essex |
New York City | Bronx, Kings, New York, Queens, and Richmond |
Oregon |
|
Portland (October 1-October 31 and April 1-September 30) | Multnomah |
Seaside (July 1-August 31) | Clatsop |
Pennsylvania |
|
Hershey (June 1-August 31) | Hershey |
Philadelphia (October 1-November 30 and April 1-September 30) | Philadelphia |
Rhode Island |
|
Jamestown/Middletown/Newport (June 1-August 31) | Newport |
South Carolina |
|
Charleston (October 1-October 31 and March 1-September 30) | Charleston, Berkeley, and Dorchester |
Texas |
|
Pecos (January 1-March 31) | Reeves |
Utah |
|
Moab (October 1-October 31 and March 1-September 30) | Grand |
Park City (December 1-March 31) | Summit |
Virginia |
|
Virginia Beach (June 1-August 31) | City of Virginia Beach |
Wallops Island (July 1-August 31) | Accomack |
Washington, DC Metro Area | Cities of Alexandria, Fairfax, and Falls Church; Counties of Arlington and Fairfax |
Washington |
|
Seattle | King |
Vancouver (October 1-October 31 and April 1-September 30) | Clark, Cowlitz, and Skamania |
Wyoming |
|
Cody (June 1-September 30) | Park |
Jackson/Pinedale (July 1-August 31) | Teton and Sublett |
3. Changes in high-cost localities. The list of high-cost localities in this notice differs from the list of high-cost localities in section 5 of Notice 2017-54.
a. The following localities have been added to the list of high-cost localities: Sedona, Arizona; Los Angeles, California; San Diego, California; Vero Beach, Florida; Jekyll Island/Brunswick, Georgia; Duluth, Minnesota; Pecos, Texas; Moab, Utah; Cody, Wyoming.
b. The following localities have changed the portion of the year in which they are high-cost localities: Oakland, California; Aspen, Colorado; Boca Raton/Delray Beach/Jupiter, Florida; Naples, Florida; Bar Harbor/Rockport, Maine; Boston/Cambridge, Massachusetts; Jamestown/Middletown/Newport, Rhode Island; Charleston, South Carolina; Vancouver, Washington; Jackson/Pinedale, Wyoming.
c. The following localities have been removed from the list of high-cost localities: Mill Valley/San Rafael/ Novato, California; Steamboat Springs, Colorado; Petoskey, Michigan; Saratoga Springs/Schenectady, New York.
d. The following localities have been redefined: Traverse City, Michigan no longer includes Leland; Bar Harbor, Maine now includes Rockport.
SECTION 6. EFFECTIVE DATE
This notice 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, 2018, for travel away from home on or after October 1, 2018. For purposes of computing the amount allowable as a deduction for travel away from home, this notice is effective for meal and incidental expenses or for incidental expenses only paid or incurred on or after October 1, 2018. See sections 4.06 and 5.04 of Rev. Proc. 2011-47 (or successor) for transition rules for the last 3 months of calendar year 2018.
SECTION 7. EFFECT ON OTHER DOCUMENTS
Notice 2017-54 is superseded.
DRAFTING INFORMATION
The principal author of this notice is Maxine Woo-Garcia of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this notice contact Maxine Woo-Garcia at (202) 317-7005 (not a toll-free call).
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Areas/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2018-38638
- Tax Analysts Electronic Citation2018 TNT 188-172018 TPR 40-7