IRS Publishes Special Per Diem Rates for 2014-2015
Notice 2014-57; 2014-42 IRB 723
- Institutional AuthorsInternal Revenue Service
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- Tax Analysts Document NumberDoc 2014-22929
- Tax Analysts Electronic Citation2014 TNT 183-19
SECTION 1. PURPOSE
This annual notice provides the 2014-2015 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 2013-65, 2013-42 I.R.B. 440, provides the rates and list of high-cost localities for the period October 1, 2013, to September 30, 2014.
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. Subsequent to 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 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 2013-65 (the per diem substantiation method) are $259 for travel to any high-cost locality and $172 for travel to any other locality within CONUS. The amount of the $259 high rate and $172 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 2013-65 (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 $216 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-May 31)
California
Monterey Monterey
(July 1-August 31)
Napa Napa
(October 1-November 30 and
February 1-September 30)
San Francisco San Francisco
San Mateo/Foster City/Belmont San Mateo
Santa Barbara Santa Barbara
Santa Cruz Santa Cruz
(June 1-August 31)
Santa Monica City limits of Santa Monica
Sunnyvale/Palo Alto/San Jose Santa Clara
Colorado
Aspen Pitkin
(December 1-March 31 and
June 1-August 31)
Denver/Aurora Denver, Adams, Arapahoe, 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-March 31 and
July 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 and Hendry
(January 1-April 30)
Fort Lauderdale Broward
(January 1-March 31)
Fort Walton Beach/De Funiak Okaloosa and Walton
Springs
(June 1-July 31)
Key West Monroe
Miami Miami-Dade
(October 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
(October 1-June 30) Plaquemine Parishes
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)
Montana
Glendive/Sidney Dawson and Richland
New Hampshire
Conway Carroll
(July 1-August 31)
New York
Glens Falls Warren
(July 1-August 31)
Lake Placid Essex
(July 1-August 31)
New York City Bronx, Kings, New York, Queens, and
Richmond
Saratoga Springs/Schenectady Saratoga and Schenectady
(July 1-August 31)
Tarrytown/White Plains/New Westchester
Rochelle
North Carolina
Kill Devil Dare
(June 1-August 31)
North Dakota
Williston Williams, Mountrail, and McKenzie
Pennsylvania
Philadelphia Philadelphia
(October 1-November 30 and
March 1-June 30 and
September 1-September 30)
Rhode Island
Jamestown/Middletown/Newport Newport
(October 1-October 31 and
May 1-September 30)
South Carolina
Charleston Charleston, Berkeley and Dorchester
(March 1-May 31)
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
Jackson/Pinedale Teton and Sublette
(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 2013-65.
a. The following localities have been added to the list of high-cost localities: San Mateo/Foster City/Belmont, California; Sunnyvale/Palo Alto/San Jose, California; Glendive/Sidney, Montana; Williston, North Dakota.
b. The following localities have changed the portion of the year in which they are high-cost localities: Sedona, Arizona; Napa, California; Vail, Colorado; Fort Lauderdale, Florida; Miami, Florida; Philadelphia, Pennsylvania.
c. The following localities have been removed from the list of high-cost localities: Yosemite National Park, California; San Diego, California; Floral Park/Garden City/Great Neck, New York.
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, 2014, for travel away from home on or after October 1, 2014. 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, 2014. See sections 4.06 and 5.04 of Rev. Proc. 2011-47 for transition rules for the last 3 months of calendar year 2014.
SECTION 7. EFFECT ON OTHER DOCUMENTS
Notice 2013-65 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) 317-7007 (not a toll-free call).
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
- Code Sections
- Subject Areas/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2014-22929
- Tax Analysts Electronic Citation2014 TNT 183-19