The Internal Revenue Service (IRS) updated its special per diem rates for the transportation industry, incidental expenses, and the “high-low” substantiation method. These rates, announced September 26 in Notice 2016-58, apply to allowances paid to employees on or after October 1 for travel on or after that date.
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The IRS’ high-low rates, used by government travelers as an alternative to the U.S. General Services Administration’s (GSA) standard per diems, were raised slightly from the fiscal year 2016 levels—$282 for travel to any high-cost locality (up from $275) and $189 (formerly $185) for any other locality in the continental United States (CONUS). The rates for meal and incidental expenses only remained unchanged at $68 and $57, respectively.
The IRS added six places to its listing of “high-cost” localities, defined as those with a federal per diem of $236 or more: Sedona, Arizona; Los Angeles; Mill Valley/San Rafael/Novato, California; Vero Beach, Florida; Kill Devil, North Carolina; and Seaside, Oregon. Meanwhile, Mammoth Lakes, California and Midland, Texas were taken off the list, and the dates of high-cost status were adjusted for eight other locales.