CONUS: is an acronym for the “Continental United Status”. To aid in tax planning and reporting: the United States State Department provides per diem rates for the contiguous 48 states (plus the District of Columbia) for meals, lodging and other travel expenses. These rates are deductible on IRS federal tax forms.
The IRS used to provide these rates, however several years ago, started to use the rates from the State Department, which is the rates that the the Department uses to reimburse its employees. What is interesting is that the rates have been a little higher than when the IRS used to determine them …. so we have eliminated a double standard here! We now can use the same rates that the government uses with its employees.
Lodging Per Diem Rate Deductions
are only allowed at the corporate level and will show on the employee’s W2 as taxable income. The employee will then deduct what they actually spent on their business lodging on Schedule A, Misc. Employee Expense Deductions. Note this will be reduced by 2% of the employee’s AGI. So even though you as an employee get reimbursed by your company for your lodging on business trips, you still need to keep and track your receipts for your return’s itemized deductions.
are frequently not reported as additional income. But if they are, they are fully deductible at the per diem rates (at the current meal deduction rates – see below) without the need to keep receipts. This is determined by the employer’s reimbursement plan.
For individuals who travel extensively to many locations, they can use high and low rates. Effective October 1, 2009, the high rate for lodging, meals and incidental expenses is $258 and the low rate is $163. For meals together with incidental expenses, without keeping receipts, the high rate is $65 and the low rate is $52.
Department Of Transportation Deductions
(effective October 1, 2009) The DOT meal and entertainment rates are higher at $59 per day for CONUS and $65 for OCONUS. For non DOT travelers the average rate is $46 a day. In addition, travelers are allowed a incidental $5 a day for expenses. DOT travelers are typically truck drivers and airline personnel to name a few professions that this applies to.
Note that for non DOT employees, only %50 of the meal is deductible, however for DOT travelers it is 80%.