The Internal Revenue Service has issued updated per diem rates that take effect Oct. 1, 2021, which taxpayers can use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home. This optional “high-low” per diem rates for lodging expenses and meals and incidental expenses (M&IE) that may be used instead of the General Services Administration’s “actual” per diem rates for travel to locations within the continental U.S., the special federal M&IE per diem rates applicable to the transportation industry, and the per diem rate for incidental expenses. The updated high-low rates apply for travel undertaken on or after October 1, 2021 [Notice 2021-52, 9-3-21].
The “high” rate for lodging expenses and M&IE increases to $296 (from $292) for travel to any high-cost locality, while the “low” rate increases to $202 (from $198) for travel to any other locality within the continental U.S. The rates for M&IE increase to $74 (from $71) for high-cost localities and to $64 (from $60) for any other locality within the continental U.S.
Calculating Per Diem Rates
The per-diem amount you will be issued for meals and lodging depends on the location to which you are traveling. There are almost 400 destinations across the United States for which a special per-diem rate has been specified. For travel to any other areas within the United States, the FY 2021 general per diem rates are used. The IRS publishes a list of high-cost destinations by state, all other locations in the Continental U.S. use the low rate.
For more information on FY 2021 travel per diem rates, please visit www.gsa.gov/perdiem.