News & Announcements

IRS Publishes 2020-2021 Per Diem Rates for Travel Expense Reimbursements

Posted Tuesday, September 22, 2020 8:00 am

The IRS published Notice 2020-71, announcing the 2020-2021 special per diem rates to be used to substantiate ordinary and necessary business expenses incurred while traveling.

  • Special transportation industry meal and incidental expenses (M&IE) rates unchanged. The special M&IE rates for taxpayers in the transportation industry remain $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).
  • Rate for the incidental expenses only deduction unchanged. The rate for any CONUS or OCONUS locality of travel for the incidental expenses only deduction remains $5 per day.
  • Rates for high-cost localities for purposes of the high-low substantiation method. For purposes of the high-low substantiation method, the per diemrates decrease to $292 for travel to any high-cost locality and $198 for travel to any other locality within CONUS.  The amount of the $292 high rate and $198 low rate that is treated as paid for meals is $71 for travel to any high-cost locality and $60 for travel to any other locality within CONUS.  The per diem rates in lieu of the M&IE only substantiation method are $71 for travel to any high-cost locality and $60 for travel to any other locality within CONUS.

The guidance also lists high-cost localities that are subject to the federal per diem rate of $245 or more.

  • The following localities have been added to the list of high-cost localities: Los Angeles, California; San Diego, California; Gulf Breeze, Florida; Kennebunk/Kittery/Sanford, Maine; Virginia Beach, Virginia.
  • The following localities have changed the portion of the year in which they are high-cost localities:Sedona, Arizona; Monterey, California; Santa Barbara, California; District of Columbia (see also Maryland and Virginia); Naples, Florida; Jekyll Island/Brunswick, Georgia; Boston/Cambridge, Massachusetts; Philadelphia, Pennsylvania; Jamestown/Middletown/Newport, Rhode Island; Charleston, South Carolina.
  • The following localities have been removed from the list of high-cost localities: Midland/Odessa, Texas; Pecos, Texas.

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, 2020, for travel away from home on or after October 1, 2020.  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, 2020.

Feature of the Month:

Resources Updated for New Hawaii Laws

Have you updated your policies, procedures, and handbook provisions to reflect the new laws? HEC has updated various resources on its website.

Learn More

Subscribe to Our Training Events Updates

Subscribe to our training events notices to get in early on upcoming events.

Back to top

Email Sign Up

Subscribe

If you are a member, please login below to manage your subscription. Otherwise, click "Continue to Subscribe"

Login

Continue to Subscribe

Subscribe

Fill out the fields below to receive HEC emails.


How did you hear about HEC?

I would like to receive the following:

News & Updates
Training Events Notices