The IRS has issued its annual notice on the per diem rates for lodging, meals and incidental expenses for travel away from home.  The new per diem rates, as outlined below, will be in effect from October 1, 2017 through September 30, 2018. 

  1. $191 – This rate covers the majority of locations in the Continental United States.  The rate includes lodging, meals and incidentals.
  2. $284 – A limited number of locations in high-cost localities qualify for this rate.
  3. $57 – Meals and Incidentals rate only.  This rate does not cover lodging.
  4. $68 – Meals and Incidentals rate only for high cost localities

The per diem method allows for contractors to use these rates to provide additional tax free compensation to their employees for out of town travel.  There is a 50% limitation on the tax deduction for meals and entertainment.      

For details on the rates and a listing of the high cost localities, please follow the link below:

https://www.irs.gov/pub/irs-drop/n-17-54.pdf