What Are the Per Diem Rules of the IRS?


Quick Answer

There are per diem rules for taxpayers that cover eligibility, rates, keeping records and reporting, says the Internal Revenue Service. Eligibility requires travel away from home. Per diem allowances up to established rates are not taxable, but employees must file expense reports with their employer to satisfy the record-keeping requirements.

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What Are the Per Diem Rules of the IRS?
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Full Answer

The travel test is satisfied if you stay away from your main place of work to perform your duties, explains the IRS. You can opt for a per diem allowance for meals instead of actual cost. In this case, you do not need to keep receipts for meals, but still need to file an expense report showing the purpose, location and dates of travel.

The per diem rates are based on Meals and Incidental Expenses established by U.S. General Services Administration. For the year 2014, this amount was $46 a day for travel to most locations within the continental United States. The amounts are higher for major cities and other localities termed high-cost areas. The rates are prorated for the days of departure and arrival.

The Department of Defense establishes per diem rates for Alaska, Hawaii and other non-foreign areas outside the continental United States, and the Department of State establishes the rates for foreign countries, according to the IRS. Amounts exceeding the per diem rates are taxable.

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