The IRS has revised their simplified per diem reimbursement rates for lodging, meals, and incidental expenses effective October 1, 2014. These rules provide convenience to employers and employees by eliminating the need to save detailed receipts for employee travel reimbursements. The rules have also been further clarified. Under the new IRS pronouncement, "incidental expenses" include only fees and tips given to porters, baggage carriers, hotel staff and staff of ships.
Transportation beween places of lodging or business and places where meals are taken (ie. cab fares) are no longer included in incedential expenses. Employees can be separately reimbursed for the actual costs of transportaion and mailing expenses, in addition to the flat daily amount for "incidental expenses".
The new per diem rates are $259 for travel to any high-cost locality and $172 for any other place. These rates are an increase from those allowed earlier. High-cost localities include: Sedona AZ, Chicago IL, New Orleans LA, Bar Harbor ME, Conway NH, Kill Devil NC, Philadelphia PA, Charleston NC, Midland TX, Park City UT, Seattle WA, Jackson/Pinedale WY and several trendy places in CA, CO, FL, MD, MA, NY and most of the Washington D.C. area. Some areas are considered high-cost for only a portion of the year.
See IRS Notice 2014-27 for complete details.
- Mark S Gleason CPA
www.lakes-cpa.com
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