2025 Per Diem Rate

This annual notice provides the 2024-2025 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically (1) the special transportation industry meal and incidental expenses (M&IE) rates, (2) the rate for the incidental expenses only deduction, and (3) the rates and list of high-cost localities for purposes of the high-low substantiation method.

The following localities have a federal per diem rate of $272 or more, and are high-cost localities for the specified portion of the calendar year:

a. The following localities have been added to the list of high-cost localities: Los Angeles, California; Mammoth Lakes, California; Palm Springs, California; South Lake Tahoe, California; Boise, Idaho; Coeur d’Alene, Idaho; Bend, Oregon; Burlington, Vermont. b. The following localities have changed the portion of the year in which they are high-cost localities: Sedona, Arizona; Monterey, California; Napa, California; San Luis Obispo, California; Yosemite National Park, California; Aspen, Colorado; Silverthorne/Breckenridge, Colorado; Lewes, Delaware; District of Columbia (see also Maryland and Virginia); Boca Raton/Delray Beach/Jupiter, Florida; Fort Myers, Florida; Tampa/St. Petersburg, Florida; Vero Beach, Florida; Bar Harbor/Rockport, Maine; Portland, Maine; Ocean City, Maryland; Washington, D.C. Metropolitan Area in Maryland (counties of Montgomery and Prince George’s); Falmouth, Massachusetts; Nantucket, Massachusetts; Petoskey, Michigan; Kalispell/Whitefish, Montana; Kill Devil Hills, North Carolina; Philadelphia, Pennsylvania; Moab, Utah; Washington, D.C. Metropolitan Area in Virginia (cities of Alexandria, Falls Church, and Fairfax; counties of Arlington and Fairfax); Seattle, Washington. c. The following localities have been removed from the list of high-cost localities: Mill Valley/San Rafael/Novato, California; Oakland, California; San Mateo/Foster City/Belmont, California; Grand Lake, Colorado; Pensacola, Florida; Punta Gorda, Florida; Missoula, Montana; Carlsbad, New Mexico; Lincoln City, Oregon; Myrtle Beach, South Carolina; Cody, Wyoming.

The amount of the $319 high rate and $225 low rate that is treated as paid for meals for purposes of § 274(n) is $86 for travel to any high- cost locality and $74 for travel to any other locality within CONUS.

Both of these methods are explained below. But, regard- less of the method you use, you can generally deduct only 50% of the unreimbursed cost of your meals.

The special M&IE rates for taxpayers in the transportation industry are $80 for any locality of travel in the continental United States (CONUS) and $86 for any locality of travel outside the continental United States (OCONUS).

This notice is effective for per diem allowances for lodging, meal and incidental expenses, or for meal and incidental expenses only, that are paid to any employee on or after October 1, 2024, for travel away from home on or after October 1, 2024.

Travel for days you depart and return. For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). You can do so by one of two methods. • Method 1: You can claim 3/4 of the standard meal al- lowance.

Per diem allowance more than federal rate. If your employer’s accountable plan pays you an allowance that is higher than the federal rate, you don’t have to return the difference between the two rates for the period you can prove business-related travel expenses. However, the dif- ference will be reported as wages on your Form W-2. This excess amount is considered paid under a nonaccounta- ble plan (discussed later).

There is no optional standard lodging amount similar to the standard meal allowance. Your al- lowable lodging expense deduction is your actual cost. Who can use the standard meal allowance. You can use the standard meal allowance whether you are an em- ployee or self-employed, and whether or not you are reim- bursed for your traveling expenses.

You must complete Form 2106 and itemize your deduc- tions to deduct your expenses for travel, transportation, or non-entertainment-related meals. Your meal and enter- tainment expenses will be subject to the 50% Limit dis- cussed in chapter 2. Caution: Form 2106 is only used by Armed Forces re- servists, qualified performing artists, fee-basis state or lo- cal government officials, and employees with impair- ment-related work expenses.