2024-2025 Special Per Diem Rates: Key Updates for Transportation and Construction Clients

The IRS has released Notice 2024-68, which outlines the updated special per diem rates for taxpayers, specifically focusing on the transportation industry. These rates play a vital role in substantiating business expenses when traveling away from home. Below is a breakdown of the key updates.

Special Meal and Incidental Expenses (M&IE) Rates for the Transportation Industry:

• CONUS (Continental United States): $80 per day

• OCONUS (Outside Continental United States): $86 per day

• Incidental Expenses Rate: The incidental expenses rate, applicable to both CONUS and OCONUS travel, remains at $5 per day.

These rates are essential for individuals working in the transportation sector to efficiently manage travel expenses.

High-Low Substantiation Method:

• High-Cost Locality: $319 per diem (of which $86 is for meals)

• Low-Cost Locality: $225 per diem (of which $74 is for meals)

These rates apply to travel within the Continental United States (CONUS) and are used for the high-low substantiation method.

Updated High-Cost Localities:

Several new high-cost localities have been added, including:

• Los Angeles, CA

• Mammoth Lakes, CA

• Boise, ID

• Burlington, VT

Additionally, certain localities have had changes to the portion of the year during which they are considered high-cost. These changes apply from October 1, 2024, to September 30, 2025. For more detailed information, refer to the official IRS notice or contact us for assistance.

Removed High-Cost Localities:

The following localities have been removed from the list of high-cost areas for 2024:

• 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

These areas no longer qualify as high-cost localities, meaning travelers can no longer claim the higher per diem rate when visiting these locations. The adjustments reflect changes in economic conditions and the cost of living, which have likely become more affordable for business travel.

For businesses, this means revising travel expense policies for employees traveling to these regions, as lower per diem rates will now apply.

Conclusion:

Understanding these updates is essential to ensuring your business remains compliant while optimizing travel expense management. If you need further clarification or help applying these new rates, feel free to reach out.

Contact us today to discuss how these changes may impact your business travel expenses.