Employers and plan administrators have more options now in choosing a way to reimburse the expenses their employees incur for lodging, meals and incidentals during business travel. The IRS in Notice 2012-63 issued per diem rates that are an alternative to the CONUS per diem rates the U.S. General Services Administration issues. The notice also provides per diem rates for those working in the transportation industry. The rates are in effect for the federal fiscal year, Oct. 1, 2012-Sept. 30, 2013.
High-low Rates
The per diem rates the IRS issued — commonly known as the high-low rates — can be used instead of the CONUS rates. Unlike the CONUS rates, which are set for hundreds of locations in the continental United States, the high-low rates only provide two rates. The “high” rate is for reimbursement of eligible expenses incurred for travel to places the IRS deems to be high-cost locations. The “low” rate is for reimbursement of expenses incurred for travel to all other locations in the continental United States.
The rates for 2013 are the same as the high-low rates the IRS set for 2011 and 2012 — the high rate is $242 and the low rate is $163. There are 43 locations in 18 states to which the high rate applies for 2013.
The high-low rates cover reimbursement of expenses for meals, lodging and incidentals. Incidental expenses include only tips given to porters, baggage carriers, hotel staff and staff on ships.
Blended Rates
The special rates for reimbursing what travelers who work in the transportation industry spend on meals and incidentals for 2013 will be $59 for CONUS travel and $65 for travel outside the continental United States. Those rates have been in effect since FY 2010.
More information about per diems is available in Section 754 of Thompson Publishing Group’s Employer’s Guide to Fringe Benefit Rules.