2016-17 Special Per Diem Rates

the rascon cpa firm, cpa services, accountant, accounting firm, entrepreneur tax advice, 8 apps that will help your business run more efficiently

The IRS has provided the 2016-2017 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. The new rates are effective October 1, 2016.

PURPOSE

This annual notice provides the 2016-2017 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.

SPECIAL M&IE RATES FOR TRANSPORTATION INDUSTRY

The special M&IE rates for taxpayers in the transportation industry are $63 for any locality of travel in the continental United States (CONUS) and $68 for any locality of travel outside the continental United States (OCONUS). See section 4.04 of Rev. Proc. 2011-47.

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.

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 2015-63 (the per diem substantiation method) are $282 for travel to any high-cost locality and $189 for travel to any other locality within CONUS. The amount of the $282 high rate and $189 low rate that is treated as paid for meals for purposes of §274(n) is $68 for travel to any high-cost locality and $57 for travel to any other locality within CONUS. The per diem rates in lieu of the rates described in Notice 2015-63 (the meal and incidental expenses only substantiation method) are $68 for travel to any high-cost locality and $57 for travel to any other locality within CONUS.

2. High-cost localities. The following localities have a federal per diem rate of $236 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
Los Angeles Los Angeles, Orange, Ventura, Edwards AFB less the city of Santa Monica
(January 1-March 31)
Mill Valley/San Rafael/Novato Marin
(October 1-October 31 and June 1-September 30)
Monterey Monterey
(July 1-August 31)
Napa Napa
(October 1-October 31 and May 1-September 30)
San Francisco San Francisco
San Mateo/Foster City/Belmont San Mateo
Santa Barbara Santa Barbara
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
(October 1-November 30 and February 1-September 30) Denver, Adams, Arapahoe, and Jefferson
Grand Lake Grand
(December 1-March 31)
Silverthorne/Breckenridge Summit
(December 1-March 31)
Steamboat Springs Routt
(December 1-March 31)
Telluride San Miguel
(December 1-March 31 and June 1-August 31)
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 and Hendry
(January 1-April 30)
Fort Lauderdale Broward
(January 1-April 30)
Fort Walton Beach/De Funiak Springs Okaloosa and Walton
(June 1-July 31)
Key West Monroe
Miami Miami-Dade
(December 1-March 31)
Naples Collier
(December 1-April 30)
Vero Beach Indian River
(December 1-April 30)
Illinois
Chicago Cook and Lake
(October 1-November 30 and April 1-September 30)
Maine
Bar Harbor Hancock
(July 1-August 31)
Maryland
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
(June 1-September 30)
Nantucket Nantucket
(October 1-December 31 and
June 1-September 30)
Michigan
Traverse City/Leland Grand Traverse and Leelanau
(July 1-August 31)
New York
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)
North Carolina
Kill Devil Dare
(June 1-August 31)
Oregon
Seaside Clatsop
(July 1-August 31)
Pennsylvania
Hershey Hershey
(June 1-August 31)
Philadelphia Philadelphia
(October 1-November 30, April 1-June 30, and September 1-September 30)
Rhode Island
Jamestown/Middletown/Newport Newport
(July 1-August 31)
South Carolina
Charleston Charleston, Berkeley and
(October 1-November 30 and March 1-September 30) Dorchester
Utah
Park City Summit
(December 1-March 31)
Virginia
Virginia Beach City of Virginia Beach
(June 1-August 31)
Wallops Island Accomack
(July 1-August 31)
Washington, DC Metro Area Cities of Alexandria, Fairfax, and Falls Church; counties of Arlington and Fairfax
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 2015-63.

a. The following localities have been added to the list of high-cost localities: Sedona, AZ; Los Angeles, California; Mill Valley/San Rafael/Novato, California; Vero Beach, Florida; Kill Devil, North Carolina; Seaside, Oregon.
b. The following localities have changed the portion of the year in which they are high-cost localities: Denver/Aurora, Colorado; Vail, Colorado; Fort Lauderdale, Florida; Naples, Florida; Chicago, Illinois; Philadelphia, Pennsylvania; Jamestown/Middletown/Newport, Rhode Island; Jackson/Pinedale, Wyoming.
c. The following localities have been removed from the list of high-cost localities: Mammoth Lakes, California; Midland, Texas.
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, 2016, for travel away from home on or after October 1, 2016. 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, 2016.

 

Leave a Reply

The Woodlands

Humble

19747 US Hwy 59 N
Suite 205
Humble, Texas 77338

Our office is located inside the Chase building in Suite 205.

(click location for map)