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IRS Updates Transportation Industry Per Diem Rates

Posted 12:00 PM by

The Internal Revenue Service issued Notice 2018-77, updating the special per diem rates under tax code Section 274(d), which is used to substantiate the amount of ordinary and necessary business expenses incurred while traveling away from home.

Effective Oct. 1, 2018, through Sept. 30, 2019, transportation’s per diem rates will increase to $66 (currently $63) for any locality of travel within the continental U.S. and $71 (currently $68) for travel outside the continental U.S.

Companies currently using per diem programs should review their plans and consider increasing per diem amounts in order to maximize a plan’s benefits. A well-implemented per diem program can be an effective tool to aid in driver retention, as well as increase profits for carriers and drivers. 

For companies not using a per diem plan, tax reform has eliminated the ability for an employee driver to take their own per diem deduction, and therefore consideration should be given to implementing this important employee benefit.

About the Author
Troy Hogan is a director in Katz, Sapper & Miller's Business Advisory Group. Troy consults with clients to manage business concerns specific to the transportation industry and crafts solutions related to tax deferral, per diem, fuel tax credits, and entity restructuring. Connect with him on LinkedIn.

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