Tax & Accounting Blog

Federal per diem expense allowance updates effective October 1, 2012

1099, ONESOURCE, Tax Information Reporting September 7, 2012

The federal per diem expense allowance rates for 2013, effective beginning October 1, have been issued in GSA Bulletin 13-01.  The standard lodging per diem rate of $77 will continue to remain in effect for the period of federal fiscal year 2013, October 1, 2012, through September 30, 2013.  The meals and incidental expense (M&I) tiers also remain unchanged, ranging from $46 to $71 per day.  All current per diem lodging rates for non-standard areas (NSAs, for which specific amounts are used in place of the standard rates) will remain at 2012 levels for the period of federal fiscal year 2013.  Ten new NSAs have been added: Bakersfield/Ridgecrest, California (Kern County); Stockton, California (San Joaquin County); Hancock and Pearl River Counties in Mississippi; Sidney/Glendive, Montana (Richland and Dawson Counties); Dickinson/Beulah, North Dakota (Stark, Mercer, and Billings Counties); Minot, North Dakota (Ward County); Williston, North Dakota (Williams, Mountrail, and McKenzie Counties); Carlsbad, New Mexico (Eddy County); Watertown, New York (Jefferson County); and Pasco, Washington (Franklin County).

The official website for look-up of the federal government “per diem” rates for business travel away from home within the continental United States is http://www.gsa.gov/portal/category/21287.

The federal per diem rates are used in place of actual expense receipts for substantiation of business travel, but remember that with either substantiation method employees must keep records to prove the time, place, and business purpose of their travel as well as mileage.  If expense reimbursements to employees or contractors are not substantiated, such payments do not qualify as tax-exempt reimbursements and instead must be included, and reported on Forms W-2 (if an employee) or 1099 (if an independent contractor), as part of the gross income paid.