IRS Publishes Special Per Diem Business, Travel Expense Substantiation Rates for 2013-2014
Notice 2013-65; 2013-44 IRB 440
- Institutional AuthorsInternal Revenue Service
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- Code Sections
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- Tax Analysts Document NumberDoc 2013-22763
- Tax Analysts Electronic Citation2013 TNT 187-9
SECTION 1. PURPOSE
This annual notice provides the 2013-2014 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, 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. Notice 2012-63, 2012-42 I.R.B. 496, provides the rates and list of high-cost localities for the period October 1, 2012, to September 30, 2013.
Section 3.02(3) of Rev. Proc. 2011-47 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. On October 22, 2012, 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 per diem rates may separately deduct 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 $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). See section 4.04 of Rev. Proc. 2011-47.
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.
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 2012-63 (the per diem substantiation method) 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 for purposes of § 274(n) is $65 for travel to any high-cost locality and $52 for travel to any other locality within CONUS. See section 5.02 of Rev. Proc. 2011-47. The per diem rates in lieu of the rates described in Notice 2012-63 (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.
2. High-cost localities. The following localities have a federal per diem rate of $210 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
(March 1-April 30)
California
Monterey Monterey
(July 1-August 31)
Napa Napa
(October 1-November 30 and April 1-September 30)
San Diego San Diego
San Francisco San Francisco
Santa Barbara Santa Barbara
Santa Cruz Santa Cruz
(June 1-August 31)
Santa Monica City limits of Santa
Monica
Yosemite National Park Mariposa
(June 1-August 31)
Colorado
Aspen Pitkin
(December 1-March 31 and June 1-August 31)
Denver/Aurora Denver, Adams,
Arapachoe, and
Jefferson
Steamboat Springs Routt
(December 1-March 31)
Telluride San Miguel
(December 1-March 31 and June 1-September 30)
Vail Eagle
(December 1-August 31)
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 Palm Beach/Hendry
(January 1-April 30)
Fort Lauderdale Broward
(January 1-May 31)
Fort Walton Beach/De Funiak Springs Okaloosa and Walton
(June 1-July 31)
Key West Monroe
Miami Miami-Dade
(January 1-March 31)
Naples Collier
(January 1-April 30)
Illinois
Chicago Cook and Lake
(October 1-November 30 and March 1-September 30)
Louisiana
New Orleans Orleans, St. Bernard,
Jefferson and
Plaquemine Parishes
(October 1-June 30)
Maine
Bar Harbor Hancock
(July 1-August 31)
Maryland
Baltimore City Baltimore City
(October 1-November 30 and March 1-September 30)
Cambridge/St. Michaels Dorchester and Talbot
(June 1-August 31)
Ocean City Worcester
(June 1-August 31)
Washington, DC Metro Area Montgomery and Prince
George's
Massachusetts
Boston/Cambridge Suffolk, City of
Cambridge
Falmouth City limits of Falmouth
(July 1-August 31)
Martha's Vineyard Dukes
(July 1-August 31)
Nantucket Nantucket
(June 1-September 30)
New Hampshire
Conway Carroll
(July 1-August 31)
New York
Floral Park/Garden City/Great Neck Nassau
Glens Falls Warren
(July 1-August 31)
Lake Placid Essex
(July 1-August 31)
Manhattan (includes the boroughs of Bronx, Kings, New York,
Manhattan, Brooklyn, the Bronx, Queens, Richmond
Queens and Staten Island)
Saratoga Springs/Schenectady Saratoga and
(July 1-August 31) Schenectady
Tarrytown/White Plains/New Rochelle Westchester
North Carolina
Kill Devil Dare
(June 1-August 31)
Pennsylvania
Philadelphia Philadelphia
Rhode Island
Jamestown/Middletown/Newport Newport
(October 1-October 31 and May 1-September 30)
South Carolina
Charleston Charleston, Berkeley
(March 1-May 31) and Dorchester
Texas
Midland Midland
Utah
Park City Summit
(December 1-March 31)
Virginia
Washington, DC Metro Area Cities of Alexandria,
Fairfax, and
Falls Church; counties
of Arlington and
Fairfax
Virginia Beach City of Virginia Beach
(June 1-August 31)
Washington
Seattle King
Wyoming Teton and Sublette
Jackson/Pinedale
(July 1-August 31)
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 2012-63.
a. The following localities have been added to the list of high-cost localities: Santa Cruz, California; Boca Raton/Delray Beach/Jupiter, Florida; Charleston, South Carolina; and Midland, Texas.
b. The following localities have changed the portion of the year in which they are high-cost localities: Monterey, California; Telluride, Colorado; Miami, Florida; Chicago, Illinois; and Park City, Utah.
c. No localities have been removed from the list of high-cost localities.
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, 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 notice is effective for meal and incidental expenses or for incidental expenses only paid or incurred on or after October 1, 2013. See sections 4.06 and 5.04 of Rev. Proc. 2011-47 for transition rules for the last 3 months of calendar year 2013.
SECTION 7. EFFECT ON OTHER DOCUMENTS
Notice 2012-63 is superseded.
DRAFTING INFORMATION
The principal author of this notice is Neville R. Jiang of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this notice contact Mr. Jiang at (202) 622-4970 (not a toll-free call).
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
- Code Sections
- Subject Areas/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2013-22763
- Tax Analysts Electronic Citation2013 TNT 187-9