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Locate the new per diem rates

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in Small Business Tax

There’s a way to simplify recordkeeping for business travel expenses.

Strategy: Use IRS-approved per diem rates. Your company can rely on this shortcut for lodging and meals and incidental expenses (M&IE) of employees on business travel.

The rates are based on amounts established by the General Services Administration (GSA).  

Here’s the whole story: The GSA sets rates each year covering government employees in the 48 states in the continental United States and the District of Columbia (the CONUS rates) as well as foreign countries. The latest rates apply to the government’s Fiscal Year (FY) 2016 spanning Oct. 1, 2015, through Sept. 30, 2016.

The IRS says private employers can use these rates to reimburse employees. If employees provide simplified substantiation—including time, place and business purpose of trips—per diems aren’t subject to income or payroll taxes. Employees don’t have to report these amounts on their tax returns.

The maxium standard per diem rate for CONUS counties increases from $129 to $140 ($89 for lodging, $51 for M&IE) for FY 2016. Per diem rates for localities that do not have standard rates, called nonstandard areas (NSAs), are listed in the per diem rate table. Total per diem rates by locality range from $140 to $428. Telluride, Colo., has the highest per diem rate for the period from Dec. 1, 2015, to March 31, 2016.

The following 15 locations that were NSAs in FY 2015 have been moved to the standard CONUS rate category in FY 2016.

  • Huntsville, Ala.
  • Modesto, Calif.
  • Driggs/Idaho Falls, Idaho
  • Springfield, Ill.
  • Covington/Slidell, La.
  • Hattiesburg, Miss.
  • Los Alamos, N.M.
  • Stateline/Carson City, Nev.
  • Oak Ridge, Tenn.
  • Greenville, Texas
  • Fredericksburg, Va.
  • Norfolk/Portsmouth, Va.
  • Prince William/Manassas, Va.
  • Anacortes/Coupeville, Wash.
  • Shepherdstown, W.V.

Refer to http://www.gsa.gov/portal/category/104711 for specific locations.

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