Internal Revenue Bulletin:  2011-42 

October 17, 2011 

Notice 2011-81

2011-2012 Special Per Diem Rates


SECTION 1. PURPOSE

This annual notice provides the 2011-2012 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 rates (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.

SECTION 2. BACKGROUND

Rev. Proc. 2011-47, 2011-42 I.R.B. , provides rules for using a per diem rate to substantiate, under § 274(d) of the Internal Revenue Code and § 1.274-5 of the Income Tax Regulations, the amount of ordinary and necessary business expenses paid or incurred while traveling away from home. Taxpayers using the rates and list of high-cost localities provided in this notice must comply with Rev. Proc. 2011-47.

SECTION 3. SPECIAL M&IE RATES FOR TRANSPORTATION INDUSTRY

The special M&IE rates for taxpayers in the transportation industry are $59 for any locality of travel in the continental United States (CONUS) and $65 for any locality of travel outside the continental United States (OCONUS). See section 4.04 of Rev. Proc. 2011-47.

SECTION 4. RATE FOR INCIDENTAL EXPENSES ONLY DEDUCTION

The rate for any CONUS or OCONUS locality of travel for the incidental expenses only deduction is $5 per day. See section 4.05 of Rev. Proc. 2011-47.

SECTION 5. HIGH-LOW SUBSTANTIATION METHOD

1. Annual high-low rates. For purposes of the high-low substantiation method, the per diem rates in lieu of the rates described in section 4.01 of Rev. Proc. 2011-47 (the per diem substantiation method) are $242 for travel to any high-cost locality and $163 for travel to any other locality within CONUS. The amount of the $242 high rate and $163 low rate that is treated as paid for meals for purposes of § 274(n) is $65 for travel to any high-cost locality and $52 for travel to any other locality within CONUS. See section 5.02 of Rev. Proc. 2011-47. The per diem rates in lieu of the rates described in section 4.02 of Rev. Proc. 2011-47 (the meal and incidental expenses only substantiation method) are $65 for travel to any high-cost locality and $52 for travel to any other locality within CONUS.

2. High-cost localities. The following localities have a federal per diem rate of $202 or more, and are high-cost localities for all of the calendar year or the portion of the calendar year specified in parentheses under the key city name.

Key City   County or other defined location
Arizona    
  Sedona   City limits of Sedona
    (March 1-April 30)    
 
California    
  Monterey   Monterey
  Napa   Napa
    (October 1-November 30 and April 1-September 30)
  San Diego   San Diego
  San Francisco   San Francisco
  Santa Barbara   Santa Barbara
  Santa Monica   City limits of Santa Monica
  Yosemite National Park   Mariposa
    (June 1-August 31)    
 
Colorado    
  Aspen   Pitkin
    (December 1-March 31 and June 1-August 31)  
  Denver/Aurora   Denver, Adams, Arapahoe, and Jefferson
  Steamboat Springs   Routt
    (December 1-March 31)    
  Telluride   San Miguel
    (December 1-March 31)    
Key City   County or other defined location
  Vail   Eagle
    (December 1-August 31)    
 
District of Columbia    
  Washington D.C. (also the cities of Alexandria, Falls Church, and Fairfax, and the counties of Arlington and Fairfax, in Virginia; and the counties of Montgomery and Prince George’s in Maryland) (See also Maryland and Virginia)
 
 
Florida    
  Fort Lauderdale   Broward
    (January 1-May 31)    
  Fort Walton Beach/De Funiak Springs Okaloosa and Walton
    (June 1-July 31)    
  Key West   Monroe
  Miami   Miami-Dade
    (December 1-March 31)    
  Naples   Collier
    (January 1-April 30)    
 
Illinois    
  Chicago   Cook and Lake
    (October 1-November 30 and April 1-September 30)
         
Louisiana    
  New Orleans   Orleans, St. Bernard, Jefferson and Plaquemine Parishes
    (October 1-June 30)    
 
Maine
  Bar Harbor   Hancock
    (July 1-August 31)    
 
Maryland    
  Baltimore City   Baltimore City
    (October 1-November 30 and March 1-September 30)  
  Cambridge/St. Michaels   Dorchester and Talbot
    (June 1-August 31)    
  Ocean City   Worcester
    (June 1-August 31)    
  Washington, DC Metro Area   Montgomery and Prince George’s
 
Massachusetts    
  Boston/Cambridge   Suffolk, City of Cambridge
  Falmouth   City limits of Falmouth
    (July 1-August 31)    
  Martha’s Vineyard   Dukes
    (July 1-August 31)    
  Nantucket   Nantucket
    (June 1-September 30)    
 
New Hampshire    
  Conway   Carroll
    (July 1-August 31)    
Key City   County or other defined location
New York    
  Floral Park/Garden City/Great Neck Nassau
  Glens Falls   Warren
    (July 1-August 31)    
  Lake Placid   Essex
    (July 1-August 31)    
  Manhattan (includes the boroughs of Manhattan, Brooklyn, the Bronx, Queens and Staten Island) Bronx, Kings, New York, Queens, Richmond
  Saratoga Springs/Schenectady   Saratoga and Schenectady
    (July 1-August 31)    
  Tarrytown/White Plains/New Rochelle Westchester
 
North Carolina    
  Kill Devil   Dare
    (June 1-August 31)    
 
Pennsylvania    
  Philadelphia   Philadelphia
 
Rhode Island    
  Jamestown/Middletown/Newport Newport
    (October 1-October 31 and May 1-September 30)  
 
Utah    
  Park City   Summit
    (January 1-March 31)    
 
Virginia    
  Washington, DC Metro Area   Cities of Alexandria, Fairfax, and Falls Church; counties of Arlington and Fairfax
  Virginia Beach   City of Virginia Beach
    (June 1-August 31)    
 
Washington    
  Seattle   King
 
Wyoming   Teton and Sublette
  Jackson/Pinedale    
    (July 1-August 31)    

3. Changes in high-cost localities. The list of high-cost localities in this notice differs from the list of high-cost localities in section 5.03 of Rev. Proc. 2010-39 (changes listed by key cities).

a. No localities have been added to the list of high-cost localities.

b. The portion of the year for which the following are high-cost localities has been changed: Yosemite National Park, California; and Chicago, Illinois.

c. The following localities have been removed from the list of high-cost localities: Phoenix/Scottsdale, Arizona; South Lake Tahoe, California; Silverthorne/Breckenridge, Colorado; Riverhead/Ronkonkoma/Melville, New York; and Stowe, Vermont.

SECTION 6. EFFECTIVE DATE

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, 2011, for travel away from home on or after October 1, 2011. For purposes of computing the amount allowable as a deduction for travel away from home, this notice is effective for meal and incidental expenses or for incidental expenses only paid or incurred on or after October 1, 2011. See sections 4.06 and 5.04 of Rev. Proc. 2011-47 for transition rules for the last 3 months of calendar year 2011.

DRAFTING INFORMATION

The principal author of this notice is Eric D. Brauer of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this notice, contact Mr. Brauer at (202) 622-4970 (not a toll-free call).


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