IRS Increases Alternative Per Diem Rate For Travel and Entertainment Expenses
| Date Posted: October 13, 2009 |
The alternative per diems companies can use to reimburse employees for business travel, sometimes called "high-low" rates, have inched up for 2010. Every year, the IRS releases alternative per diem rates for employers that choose not to use the continental U.S. (CONUS) per diem rates set by the General Services Administration (GSA). The new high-low rates are from Oct. 1, 2009 through Sept. 30, 2010
The "high" per diem rate for 2010 is $258 (up from $256 last year) for travel to any high-cost locality, defined as a place for which the GSA has set a maximum CONUS per diem of $211 or more.
The "low" per diem for 2010 is $163 (up from $158 in 2009). The low rate applies to travel to any destination not considered to be a high-cost location.
Revised Location List
There are changes in the list of locations that are considered to be high-cost. The IRS dropped three locations and added seven. Plus, the agency changed seasonal information for 11 locations, meaning, the times of year for which they are considered high-cost.
Using the High-Low Per Diem Rates
Like the CONUS rates, the high-low rates include allowances for lodging as well as meals and incidental expenses (M&IE). Unlike the CONUS set of rates, the high-low set provides only two rates — one for the listed high-cost locations and one for all others. Employers may use these instead of keeping track of the 400 locations that do not have standard CONUS rates assigned to them.
Employers generally use the high-low rates only when they provide advances or reimbursements to employees for both lodging and M&IE. Using the high-low rates can offer employers and employees an advantage, since the high-low rates for some locations may exceed the CONUS rate for those locations, which may give employees a wider range of options when they travel.
Employers that provide reimbursements only for M&IE cannot use the high-low rates — they must use the CONUS rates instead.
The 2010 high-low per diem rates are published in Revenue Procedure (Rev. Proc. 2009-47. Employers and plan administrators can find out more about the 2010 rates by calling (202) 622-4930.
For more information on reimbursement rates, see the Employer's Guide to Fringe Benefits Rules by Thompson Publishing Group.
The "high" per diem rate for 2010 is $258 (up from $256 last year) for travel to any high-cost locality, defined as a place for which the GSA has set a maximum CONUS per diem of $211 or more.
The "low" per diem for 2010 is $163 (up from $158 in 2009). The low rate applies to travel to any destination not considered to be a high-cost location.
Revised Location List
There are changes in the list of locations that are considered to be high-cost. The IRS dropped three locations and added seven. Plus, the agency changed seasonal information for 11 locations, meaning, the times of year for which they are considered high-cost.
Using the High-Low Per Diem Rates
Like the CONUS rates, the high-low rates include allowances for lodging as well as meals and incidental expenses (M&IE). Unlike the CONUS set of rates, the high-low set provides only two rates — one for the listed high-cost locations and one for all others. Employers may use these instead of keeping track of the 400 locations that do not have standard CONUS rates assigned to them.
Employers generally use the high-low rates only when they provide advances or reimbursements to employees for both lodging and M&IE. Using the high-low rates can offer employers and employees an advantage, since the high-low rates for some locations may exceed the CONUS rate for those locations, which may give employees a wider range of options when they travel.
Employers that provide reimbursements only for M&IE cannot use the high-low rates — they must use the CONUS rates instead.
The 2010 high-low per diem rates are published in Revenue Procedure (Rev. Proc. 2009-47. Employers and plan administrators can find out more about the 2010 rates by calling (202) 622-4930.
For more information on reimbursement rates, see the Employer's Guide to Fringe Benefits Rules by Thompson Publishing Group.
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