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Per Diem Rates, Publication 1542 (3/2008)

What's New

Maximum per diem rates. Beginning March 17, 2008, the maximum per diem rate changes for certain locations in the following states.

Alabama
California
Illinois
Missouri
New York
Texas

See Table 4 for the new rates.

Introduction

This publication is for employers who pay a per diem allowance to employees for business travel away from home within the continental United States (CONUS) (the 48 contiguous states), on or after October 1, 2006, and before January 1, 2009. It gives the maximum per diem rate you can use without treating part of the per diem allowance as wages for tax purposes. For a detailed discussion on the tax treatment of a per diem allowance, see chapter 11 of Publication 535, Business Expenses, or Revenue Procedure 2007-63, 2007-42 I.R.B. You can find the revenue procedure in the weekly Internal Revenue Bulletin (IRB) on the Internet at www.irs.gov/irb.

Per diem rates on the Internet.

You will find links to per diem rates at www.gsa.gov. Click on “Per Diem Rates” for links to:

CONUS per diem rates,
Per diem rates for areas outside the continental United States (OCONUS), such as Alaska, Hawaii, Puerto Rico, and U.S. possessions, and
Foreign per diem rates.

Publication 1542 revisions.

Publication 1542 is only available on the Internet at www.irs.gov. Print copies can no longer be ordered.

During the year, as changes to the federal per diem rates (updates) are announced by the General Services Administration (GSA), we will incorporate the changes into Publication 1542. A “What's Hot” article on the IRS website will alert you to which locations have updated rates. You will find the new rates in Table 4 of the revised publication. To reach the “What's Hot” articles, go to www.irs.gov/formspubs; click on What's Hot in forms and publications; then click on the link provided under Changes to Our Current Tax Products.

We will also incorporate mid-year changes to the high-low rates into Publication 1542. You will be alerted to these changes by a “What's Hot” article on the IRS website, and find the changes in Table 2 of the revised publication.

The annual changes, both federal per diem and high-low rates, will be incorporated into the publication as soon as possible after being announced by GSA and the IRS. The annual issue of the publication should be available each year in mid- to late-October.

How To Use Per Diem Rate Tables

This section contains information about the per diem rate substantiation methods available and the choice of rates you must make for the last 3 months of the year.

The Two Substantiation Methods

The tables in this publication reflect the high-low substantiation method and the regular federal per diem rate method.

High-low method.

The first two tables in this publication list the localities that are treated under the high-low substantiation method as high-cost localities for all or part of the year. Table 1 lists the localities that are eligible for $246 ($58 meals and incidental expenses (M&IE)) per diem, effective October 1, 2006. For travel on or after October 1, 2006, all other localities within CONUS are eligible for $148 ($45 M&IE) per diem under the high-low method.

Table 2 lists the localities that are eligible for $237 ($58 M&IE) per diem, effective October 1, 2007. For travel on or after October 1, 2007, the per diem for all other localities increases to $152 ($45 M&IE).

Regular federal per diem rate method.

Tables 3 and 4 give the regular federal per diem rates published by the General Services Administration (GSA). Both tables include the separate rate for meals and incidental expenses (M&IE) for each locality. The rates listed in Table 3 are effective October 1, 2006; those in Table 4 are effective October 1, 2007. The standard rate for all locations within CONUS not specifically listed in Table 3 is $99 ($60 for lodging and $39 for M&IE). For Table 4, this rate is $109 ($70 for lodging and $39 for M&IE).

Transition Rules

The transition period covers the last 3 months of the calendar year, from the time that new rates are effective (generally October 1) through December 31. During this period, you generally may change to the new rates or finish out the year with the rates you had been using.

High-low method.

If you use the high-low substantiation method for an employee, when new rates become effective (generally October 1) you can either continue with the rates you used for the first part of the year or change to the new rates. However, you must continue using the high-low method for that employee for the rest of the calendar year (through December 31). Also, you must use the same rates for all employees reimbursed under the high-low method during that calendar year.

For example, Employee A travels extensively during March and April of 2008, and you determine A's travel allowance (reimbursement) using the high-low method (Table 2). Employee A does not travel again until November 2008. For A's November trip and any others during the remainder of 2008, you may continue using the same set of rates (Table 2) or change to the new rates that generally will be effective in October. Assume that two of your other employees, B and C, are also reimbursed under the high-low method—your choice of rates must also apply to them.

For Employee A's travel on or after January 1, 2009, you must use the rates in effect for 2009, but may either continue with the high-low method or choose the regular federal per diem rate method. The choice of method stays in effect for the entire 2009 calendar year.

The new rates and localities for the high-low method are included each year in a revenue procedure that is generally published in mid- to late-September. You can find the revenue procedure in the weekly Internal Revenue Bulletin (IRB) on the Internet at www.irs.gov/irb.

Federal per diem rate method.

New CONUS per diem rates become effective on October 1 of each year, and remain in effect through September 30 of the following year. Employees being reimbursed under the per diem rate method during the first 9 months of a year (January 1-September 30) must continue under the same method through the end of that calendar year (December 31). However, for travel by these employees from October 1 through December 31, you can choose to continue using the same per diem rates or use the new rates. Your choice applies to all employees reimbursed under the per diem rate method during that calendar year. Just as for the high-low method, you must continue using the same method for an employee for the entire calendar year.

For example, Employees P and Q attend an industry conference in February 2008 and you reimburse their expenses using the per diem rate method (Table 4). Employee P attends other conferences in July (reimbursed using Table 4) and December 2008, while Employee Q's only other travel occurs in October 2008. When determining Q's travel allowance for the October travel, you must decide whether to continue with the old (Table 4) rates, or adopt the new ones effective October 1, 2008. Your choice of rates will also apply to Employee P's December travel. Both employees must continue being reimbursed under the per diem rate method for travel through December 31, 2008. You can choose a new method for either or both employees; this choice will become effective on January 1, 2009.

The new federal CONUS per diem rates are published each year, generally early in September, on the Internet at www.gsa.gov.

Per diem rates for localities listed in Table 4 may change at any time during the rest of 2007 or 2008. To be sure you have the most current rate, check the IRS website ( www.irs.gov) for an updated Publication 1542, the other Internet website listed earlier under Per diem rates on the Internet , or call the IRS at 1-800-829-1040.

Per Diem Rate Tables

Table 1. Localities Eligible for $246 ($58 M&IE) Per Diem Amount Under the High-Low Substantiation Method (Effective October 1, 2006 - September 30, 2007) ^1,2

Note: The standard (“low”) rate of $148 ($103 for lodging and $45 for M&IE) applies to all locations within the continental United States (CONUS) not specifically listed below or encompassed by the boundary definition of a listed point.

Per Diem Locality			Effective Date of
State	Key City	County and/or Other Defined Location	$246 Rate
AZ	Phoenix, Scottsdale	Maricopa	1/1 - 3/31
CA	San Francisco	San Francisco	All year
	Santa Barbara	Santa Barbara	7/1 - 8/31
	Santa Monica	City limits of Santa Monica	All year
	South Lake Tahoe	El Dorado	1/1 - 3/31 12/1 - 12/31
CO	Aspen	Pitkin	1/1 - 4/30 12/1 - 12/31
	Crested Butte, Gunnison	Gunnison	1/1 - 4/30 12/1 - 12/31
	Steamboat Springs	Routt	1/1 - 3/31 12/1 - 12/31
	Telluride	San Miguel	1/1 - 4/30 10/1 - 12/31
	Vail	Eagle	1/1 - 3/31 12/1 - 12/31
DC	Washington, DC (also the cities of Alexandria, Fairfax, and Falls Church, and the counties of Arlington and Fairfax, in Virginia; and the counties of Montgomery and Prince George's in Maryland)		All year
FL	Fort Lauderdale	Broward	1/1 - 3/31
	Fort Walton Beach, DeFuniak Springs	Okaloosa, Walton	6/1 - 7/31
	Key West	Monroe	All year
	Miami	Miami-Dade	1/1 - 3/31
	Naples	Collier	2/1 - 3/31
	Palm Beach	Palm Beach (also the cities of Boca Raton, Delray Beach, Jupiter, Palm Beach Gardens, Palm Beach Shores, Singer Island, and West Palm Beach)	2/1 - 3/31
	Stuart	Martin	2/1 - 3/31
IL	Chicago	Cook, Lake	All year
LA	New Orleans	Orleans, St. Bernard, Jefferson, and Plaquemines Parishes	1/1 - 5/31 10/1 - 12/31
MA	Boston, Cambridge	Suffolk; City of Cambridge	All year
	Martha's Vineyard	Dukes	6/1 - 8/31
	Nantucket	Nantucket	6/1 - 11/30
MD	Counties of Montgomery and Prince George's		All year
	Baltimore	Baltimore City	All year
	Cambridge, St. Michaels	Dorchester, Talbot	5/1 - 8/31
	Ocean City	Worcester	6/1 - 9/30

Table 1. (Effective October 1, 2006 - September 30, 2007) (Continued)

Per Diem Locality			Effective Date of
State	Key City	County and/or Other Defined Location	$246 Rate
NY	Floral Park, Garden City, Glen Cove, Great Neck, Roslyn	Nassau	All year
	Lake Placid	Essex	7/1 - 8/31
	Manhattan	Boroughs of Manhattan, Brooklyn, the Bronx, and Staten Island	All year
	Queens	Queens	All year
	Saratoga Springs, Schenectady	Saratoga, Schenectady	7/1 - 8/31
PA	Philadelphia	Philadelphia	All year
RI	Jamestown, Middletown, Newport	Newport	3/1 - 11/30
	Providence	Providence	All year
UT	Park City	Summit	1/1 - 3/31 12/1 - 12/31
VA	Cities of Alexandria, Falls Church, and Fairfax; counties of Arlington and Fairfax		All year
WA	Seattle	King	All year

¹ Transition rule. A payor who uses the high-low substantiation method
in Table 1 for an employee during the first 9 months of calendar year 2007
must continue to use the high-low substantiation method for the remainder
of calendar year 2007 for that employee. For travel on or after October 1, 2007, and before January 1, 2008, the payor may continue to use the rates and high-cost localities published in Table 1 or the updated rates and

high-cost localities published in the revenue procedure that supersedes Revenue Procedure 2006-41, as long as those rates and localities are used consistently during this period for all employees reimbursed under this method. See Transition Rules under How To Use Per Diem Rate Tables for an example.

² Revenue Procedure 2006-41 in Internal Revenue Bulletin No. 2006-43 and Announcement 2006-96 in Internal Revenue Bulletin No. 2006-50.

Table 2. Localities Eligible for $237 ($58 M&IE) Per Diem Amount Under the High-Low Substantiation Method (Effective October 1, 2007) ^1,2

Note: The standard (“low”) rate of $152 ($107 for lodging and $45 for M&IE) applies to all locations within the continental United States (CONUS) not specifically listed below or encompassed by the boundary definition of a listed point.

Per Diem Locality			Effective Date of
State	Key City	County and/or Other Defined Location	$237 Rate
AZ	Phoenix, Scottsdale	Maricopa	1/1 - 3/31
	Sedona	City limits of Sedona	3/1 - 4/30
CA	Napa	Napa	All year
	Palm Springs	Riverside	1/1 - 4/30
	San Diego	San Diego	All year
	San Francisco	San Francisco	All year
	Santa Barbara	Santa Barbara	All year
	Santa Monica	City limits of Santa Monica	All year
	South Lake Tahoe	El Dorado	1/1 - 3/31 12/1 - 12/31
	Yosemite National Park	Mariposa	All year
CO	Aspen	Pitkin	1/1 - 4/30 12/1 - 12/31
	Crested Butte, Gunnison	Gunnison	1/1 - 3/31 12/1 - 12/31
	Silverthorne, Breckenridge	Summit	1/1 - 3/31 12/1 - 12/31
	Steamboat Springs	Routt	1/1 - 2/29 12/1 - 12/31
	Telluride	San Miguel	1/1 - 3/31 10/1 - 12/31
	Vail	Eagle	All year
DC	Washington, DC (also the cities of Alexandria, Fairfax, and Falls Church, and the counties of Arlington and Fairfax, in Virginia; and the counties of Montgomery and Prince George's in Maryland)		All year
FL	Fort Lauderdale	Broward	1/1 - 4/30 10/1 - 12/31
	Fort Walton Beach, DeFuniak Springs	Okaloosa, Walton	6/1 - 7/31
	Key West	Monroe	All year
	Miami	Miami-Dade	1/1 - 2/29 10/1 - 12/31
	Naples	Collier	2/1 - 3/31
	Palm Beach	Palm Beach (also the cities of Boca Raton, Delray Beach, Jupiter, Palm Beach Gardens, Palm Beach Shores, Singer Island, and West Palm Beach)	1/1 - 3/31
	Stuart	Martin	2/1 - 3/31
IL	Chicago	Cook, Lake	All year
MA	Boston, Cambridge	Suffolk; City of Cambridge	All year
	Martha's Vineyard	Dukes	7/1 - 8/31
	Nantucket	Nantucket	All year
MD	Counties of Montgomery and Prince George's		All year
	Baltimore	Baltimore City	All year
	Cambridge, St. Michaels	Dorchester, Talbot	4/1 - 8/31
	Ocean City	Worcester	6/1 - 8/31

Table 2. (Effective October 1, 2007) (Continued)

Per Diem Locality			Effective Date of
State	Key City	County and/or Other Defined Location	$237 Rate
NH	Conway	Carroll	7/1 - 8/31
NV	Incline Village, Crystal Bay, Reno, Sparks	Washoe	6/1 - 8/31
NY	Floral Park, Garden City, Glen Cove, Great Neck, Roslyn	Nassau	All year
	Manhattan	Boroughs of Manhattan, Brooklyn, the Bronx, and Staten Island	All year
	Queens	Queens	All year
	Saratoga Springs, Schenectady	Saratoga, Schenectady	7/1 - 8/31
	Tarrytown, White Plains, New Rochelle, Yonkers	Westchester	All year
PA	Philadelphia	Philadelphia	All year
RI	Jamestown, Middletown, Newport	Newport	2/1 - 11/30
	Providence	Providence	All year
UT	Park City	Summit	1/1 - 3/31
VA	Cities of Alexandria, Falls Church, and Fairfax; counties of Arlington and Fairfax		All year
	Loudon County	Loudon	All year
	Virginia Beach	City of Virginia Beach	6/1 - 8/31
WA	Seattle	King	All year
WI	Lake Geneva	Walworth	6/1 - 9/30

¹ Transition rule. A payor who uses the high-low substantiation method
in Table 2 for an employee during the first 9 months of calendar year 2008
must continue to use the high-low substantiation method for the remainder
of calendar year 2008 for that employee. For travel on or after October 1, 2008, and before January 1, 2009, the payor may continue to use the rates and high-cost localities published in Table 2 or the updated rates and

high-cost localities published in the revenue procedure that supersedes Revenue Procedure 2007-63, as long as those rates and localities are used consistently during this period for all employees reimbursed under this method. See Transition Rules under How To Use Per Diem Rate Tables for an example.

² Revenue Procedure 2007-63 in Internal Revenue Bulletin No. 2007-42.

Table 3. Maximum Federal Per Diem Rates (Effective October 1, 2006 - September 30, 2007) ¹

Note: The standard rate of $99 ($60 for lodging and $39 for M&IE) applies to all locations within the continental United States (CONUS) not specifically listed below or encompassed by the boundary definition of a listed point. However, the standard CONUS rate applies to all locations within CONUS, including those defined below, for certain relocation allowances. (See parts 302-2, 302-4, and 302-5 of 41 CFR.)

Per Diem Locality				Computing Maximum Rate
State	Key City ²	County and/or Other Defined Location ^3,4	Effective Dates	Maximum Lodging Rate	M&IE Rate	Maximum Per Diem Rate
AL	Birmingham	Jefferson, Shelby	All year	$80	$44	$124
	Gulf Shores	Baldwin	1/1 - 5/31	88	39	127
			6/1 - 7/31	107	39	146
			8/1 - 12/31	88	39	127
	Huntsville	Madison, Limestone	All year	71	44	115
	Montgomery	Montgomery	All year	73	39	112
AR	Hot Springs	Garland	All year	87	49	136
	Little Rock	Pulaski	All year	76	54	130
AZ	Grand Canyon, Flagstaff	Coconino (except city limits of Sedona)	1/1 - 2/28	65	44	109
			3/1 - 10/31	81	44	125
			11/1 - 12/31	65	44	109
	Kayenta	Navajo	All year	71	54	125
	Phoenix, Scottsdale	Maricopa	1/1 - 3/31	141	59	200
			4/1 - 5/31	109	59	168
			6/1 - 8/31	74	59	133
			9/1 - 12/31	103	59	162
	Sedona	City of Sedona that falls within Yavapai and	1/1 - 2/28	107	64	171
		Coconino Counties	3/1 - 5/31	118	64	182
			6/1 - 12/31	107	64	171
	Sierra Vista	Cochise	All year	66	39	105
	Tucson	Pima	1/1 - 3/31	119	49	168
			4/1 - 12/31	83	49	132
	Yuma	Yuma	All year	71	39	110
CA	Antioch, Brentwood, Concord, Lafayette, Martinez, Pleasant Hill, Richmond, San Ramon, Walnut Creek	Contra Costa	All year	104	49	153
	Bakersfield, Delano (Naval Weapons Center and Ordnance Test Station, China Lake)	Kern	All year	70	44	114
	Barstow, Ontario, Victorville	San Bernardino	All year	87	59	146
	Benicia, Dixon, Fairfield, Vacaville, Vallejo	Solano	All year	87	44	131
	Brawley, Calexico, El Centro, Imperial	Imperial	All year	75	39	114
	Chico, Oroville	Butte	All year	68	39	107
	Clearlake	Lake	All year	65	44	109
	Death Valley	Inyo	All year	76	49	125
	Fresno	Fresno	All year	79	54	133
	Los Angeles	Los Angeles, Orange, Ventura; Edwards AFB	All year	110	64	174

Table 3. (Effective October 1, 2006 - September 30, 2007) (Continued)

Per Diem Locality				Computing Maximum Rate
State	Key City ²	County and/or Other Defined Location ^3,4	Effective Dates	Maximum Lodging Rate	M&IE Rate	Maximum Per Diem Rate
CA	Mammoth Lakes	Mono	All year	$101	$54	$155
	Mill Valley, San Rafael, Novato, Corte Madera, Sausalito, Tiburon, Larkspur	Marin	All year	104	54	158
	Modesto	Stanislaus	All year	79	49	128
	Monterey	Monterey	Before 3/30/07	111	64	175
			After 3/29/07	123	64	187
	Napa	Napa	All year	129	64	193
	Oakhurst	Madera	1/1 - 1/31	64	39	103
			2/1 - 8/31	75	39	114
			9/1 - 12/31	64	39	103
	Oakland	Alameda	Before 3/30/07	94	59	153
			After 3/29/07	98	59	157
	Palm Springs	Riverside	1/1 - 4/30	131	59	190
			5/1 - 8/31	88	59	147
			9/1 - 12/31	105	59	164
	Point Arena, Gualala	Mendocino	All year	71	54	125
	Redding	Shasta	All year	78	44	122
	Sacramento	Sacramento	All year	103	59	162
	San Diego	San Diego	All year	131	64	195
	San Francisco	San Francisco	All year	140	64	204
	San Luis Obispo	San Luis Obispo	All year	102	54	156
	San Mateo, Foster	San Mateo	Before 3/30/07	98	54	152
	City, Belmont		After 3/29/07	107	54	161
	Santa Barbara	Santa Barbara	Before 3/30/07:
			1/1 - 6/30	130	59	189
			7/1 - 8/31	169	59	228
			9/1 - 12/31	130	59	189
			After 3/29/07:
			1/1 - 3/29	130	59	189
			3/30 - 6/30	137	59	196
			7/1 - 8/31	181	59	240
			9/1 - 9/30	137	59	196
			10/1 - 12/31	130	59	189
	Santa Cruz	Santa Cruz	1/1 - 5/31	101	54	155
			6/1 - 8/31	126	54	180
			9/1 - 12/31	101	54	155
	Santa Monica	City limits of Santa Monica	All year	170	64	234
	Santa Rosa	Sonoma	All year	108	64	172
	South Lake Tahoe	El Dorado	1/1 - 3/31	144	54	198
			4/1 - 6/30	106	54	160
			7/1 - 11/30	122	54	176
			12/1 - 12/31	144	54	198
	Stockton	San Joaquin	All year	75	44	119
	Sunnyvale, Palo Alto, San Jose	Santa Clara	All year	110	59	169
	Tahoe City	Placer	All year	98	59	157
	Truckee	Nevada	All year	87	59	146
	Visalia, Lemoore	Tulare, Kings	All year	70	49	119
	West Sacramento	Yolo	All year	75	44	119

Table 3. (Effective October 1, 2006 - September 30, 2007) (Continued)

Per Diem Locality				Computing Maximum Rate
State	Key City ²	County and/or Other Defined Location ^3,4	Effective Dates	Maximum Lodging Rate	M&IE Rate	Maximum Per Diem Rate
CA	Yosemite National Park	Mariposa	1/1 - 3/31	$129	$64	$193
			4/1 - 8/31	85	64	149
			9/1 - 12/31	129	64	193
CO	Aspen	Pitkin	1/1 - 4/30	225	64	289
			5/1 - 8/31	127	64	191
			9/1 - 11/30	108	64	172
			12/1 - 12/31	225	64	289
	Boulder, Broomfield	Boulder, Broomfield	All year	93	54	147
	Colorado Springs	El Paso	All year	80	44	124
	Cortez	Montezuma	1/1 - 5/31	70	39	109
			6/1 - 8/31	86	39	125
			9/1 - 12/31	70	39	109
	Crested Butte, Gunnison	Gunnison	1/1 - 1/31	240	49	289
			2/1 - 4/30	222	49	271
			5/1 - 11/30	84	49	133
			12/1 - 12/31	240	49	289
	Denver, Aurora	Denver, Adams, Jefferson, and Arapahoe	All year	127	49	176
	Douglas County	Douglas	All year	84	54	138
	Durango	La Plata	1/1 - 5/31	81	49	130
			6/1 - 9/30	106	49	155
			10/1 - 12/31	81	49	130
	Fort Collins, Loveland	Larimer	All year	80	44	124
	Glenwood Springs, Grand Junction	Garfield, Mesa	All year	69	49	118