Starting October 1, 2024, taxpayers utilizing the per diem substantiation method for travel and business expenses will experience higher rates, as outlined in IRS Notice 2024-68. These changes apply to taxpayers reimbursed for travel within the continental United States as part of the IRS’s annual update.

Key Changes

This year, several noteworthy updates have been introduced regarding per diem rates for high- and non-high-cost localities within the continental United States. Among the changes:

• High-Cost Localities: The per diem rate for high-cost localities will increase to $319 (from $309).
• Non-High-Cost Localities: The rate for non-high-cost localities will increase to $225 (from $214).
• Meals Allocation: The portion allocated for meals will rise to $86 for high-cost areas and $74 for all other areas.

High-Low Substantiation Method

The high-low substantiation method assigns a higher rate to designated high-cost localities and a lower rate to all other localities. Employers paying per diem allowances instead of reimbursing actual lodging and meal expenses will need to follow the updated federal rates for travel within the continental United States.

• High-Cost Localities: $319 per diem.
• Non-High-Cost Localities: $225 per diem.

Transportation Industry Rates

For taxpayers in the transportation industry, the meals and incidental expenses rates remain unchanged:

• $80 for travel within the continental United States.
• $86 for travel outside the continental United States.

These updates will be effective from October 1, 2024, through September 30, 2025.

For more information on the new per diem rates and how they affect your business, please contact your CRI advisor. They can provide the personalized guidance and support needed to ensure compliance with the updated IRS regulations.