Notice 2023-68
Notice 2023-68
SECTION 1. PURPOSE
This annual notice provides the 2023-2024 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 (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. 2019-48, 2019-51 I.R.B. 1392 (or successor), 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. 2019-48 (or successor). Notice 2022-44, 2022-41 I.R.B. 277, provides the rates and list of high-cost localities for the period October 1, 2022, to September 30, 2023.
SECTION 3. SPECIAL M&IE RATES FOR TRANSPORTATION INDUSTRY
The special M&IE rates for taxpayers in the transportation industry are $69 for any locality of travel in the continental United States (CONUS) and $74 for any locality of travel outside the continental United States (OCONUS). See section 4.04 of Rev. Proc. 2019-48 (or successor).
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. 2019-48 (or successor).
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 Notice 2022-44 (the per diem substantiation method) are $309 for travel to any high-cost locality and $214 for travel to any other locality within CONUS. The amount of the $309 high rate and $214 low rate that is treated as paid for meals for purposes of § 274(n) is $74 for travel to any high-cost locality and $64 for travel to any other locality within CONUS. See section 5.02 of Rev. Proc. 2019-48 (or successor). The per diem rates in lieu of the rates described in Notice 2022-44 (the meal and incidental expenses only substantiation method) are $74 for travel to any high-cost locality and $64 for travel to any other locality within CONUS.
2. High-cost localities. The following localities have a federal per diem rate of $261 or more, and are high-cost localities for the specified portion of the calendar year:
| Key City | County or Other Defined Location | Portion of Calendar Year |
|---|---|---|
| Alabama | ||
| Gulf Shores | Baldwin | June 1 – July 31 |
| Arizona | ||
| Phoenix/Scottsdale | Maricopa | February 1 – March 31 |
| Sedona | City limits of Sedona | October 1 – September 30 |
| California | ||
| Mill Valley/San Rafael/Novato | Marin | October 1 – October 31 and June 1 – September 30 |
| Monterey | Monterey | June 1 – August 31 |
| Napa | Napa | October 1 – September 30 |
| Oakland | Alameda | October 1 – September 30 |
| San Diego | San Diego | October 1 – September 30 |
| San Francisco | San Francisco | October 1 – September 30 |
| San Luis Obispo | San Luis Obispo | June 1 – August 31 |
| San Mateo/Foster City/Belmont | San Mateo | October 1 – September 30 |
| Santa Barbara | Santa Barbara | October 1 – September 30 |
| Santa Monica | City limits of Santa Monica | October 1 – September 30 |
| Sunnyvale/Palo Alto/San Jose | Santa Clara | October 1 – September 30 |
| Yosemite National Park | Mariposa | October 1 – September 30 |
| Colorado | ||
| Aspen | Pitkin | October 1 – March 31 and June 1 – September 30 |
| Denver/Aurora | Denver, Adams, Arapahoe, and Jefferson | October 1 – October 31 and April 1 – September 30 |
| Grand Lake | Grand | December 1 – March 31 |
| Silverthorne/Breckenridge | Summit | October 1 – March 31 and June 1 – September 30 |
| Steamboat Springs | Routt | December 1 – March 31 |
| Telluride | San Miguel | October 1 – September 30 |
| Vail | Eagle | October 1 – September 30 |
| Delaware | ||
| Lewes | Sussex | July 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) | October 1 – June 30 and September 1 – September 30 | |
| Florida | ||
| Boca Raton/Delray Beach/Jupiter | Palm Beach and Hendry | December 1 – April 30 |
| Bradenton | Manatee | February 1 – March 31 |
| Cocoa Beach | Brevard | February 1 – March 31 |
| Fort Lauderdale | Broward | January 1 – April 30 |
| Fort Myers | Lee | December 1 – March 31 |
| Fort Walton Beach/DeFuniak Springs | Okaloosa and Walton | June 1 – July 31 |
| Gulf Breeze | Santa Rosa | June 1 – July 31 |
| Key West | Monroe | October 1 – September 30 |
| Miami | Miami-Dade | December 1 – May 31 |
| Naples | Collier | December 1 – April 30 |
| Panama City | Bay | June 1 – July 31 |
| Pensacola | Escambia | June 1 – July 31 |
| Punta Gorda | Charlotte | February 1 – March 31 |
| Sarasota | Sarasota | February 1 – April 30 |
| Sebring | Highlands | February 1 – March 31 |
| Stuart | Martin | February 1 – March 31 |
| Tampa/St. Petersburg | Pinellas and Hillsborough | January 1 – April 30 |
| Vero Beach | Indian River | October 1 – September 30 |
| Georgia | ||
| Atlanta | Fulton and Dekalb | January 1 – March 31 |
| Jekyll Island/Brunswick | Glynn | March 1 – July 31 |
| Idaho | ||
| Sun Valley/Ketchum | Blaine and Elmore | December 1 – March 31 and June 1 – September 30 |
| Illinois | ||
| Chicago | Cook and Lake | October 1 – November 30 and April 1 – September 30 |
| Maine | ||
| Bar Harbor/Rockport | Hancock and Knox | October 1 – October 31 and July 1 – September 30 |
| Kennebunk/Kittery/Sanford | York | July 1 – August 31 |
| Portland | Cumberland and Sagadahoc | October 1 – October 31 and July 1 – September 30 |
| Maryland | ||
| Ocean City | Worcester | July 1 – August 31 |
| Washington, D.C. Metropolitan Area | Montgomery and Prince George’s | October 1 – June 30 and September 1 – September 30 |
| Massachusetts | ||
| Boston/Cambridge | Suffolk and City of Cambridge | October 1 – September 30 |
| Falmouth | City limits of Falmouth | May 1 – August 31 |
| Hyannis | Barnstable less the City of Falmouth | July 1 – August 31 |
| Martha's Vineyard | Dukes | October 1 – September 30 |
| Nantucket | Nantucket | October 1 – September 30 |
| Michigan | ||
| Mackinac Island | Mackinac | July 1 – August 31 |
| Petoskey | Emmet | July 1 – August 31 |
| Traverse City | Grand Traverse | July 1 – August 31 |
| Minnesota | ||
| Duluth | St. Louis | October 1 – October 31 and June 1 – September 30 |
| Montana | ||
| Big Sky/West Yellowstone/Gardiner | Gallatin and Park | June 1 – September 30 |
| Kalispell/Whitefish | Flathead | July 1 – August 31 |
| Missoula | Missoula | June 1 – September 30 |
| New Jersey | ||
| Toms River | Ocean | July 1 – August 31 |
| New Mexico | ||
| Carlsbad | Eddy | October 1 – September 30 |
| New York | ||
| Glens Falls | Warren | July 1 – August 31 |
| Lake Placid | Essex | July 1 – August 31 |
| New York City | Bronx, Kings, New York, Queens, and Richmond | October 1 – December 31 and March 1 – September 30 |
| Saratoga Springs/Schenectady | Saratoga and Schenectady | July 1 – August 31 |
| North Carolina | ||
| Kill Devil Hills | Dare | April 1 – September 30 |
| Oregon | ||
| Eugene/Florence | Lane | June 1 – July 31 |
| Lincoln City | Lincoln | July 1 – August 31 |
| Seaside | Clatsop | July 1 – August 31 |
| Pennsylvania | ||
| Hershey | Hershey | June 1 – August 31 |
| Philadelphia | Philadelphia | October 1 – November 30, March 1 – June 30, and September 1 – September 30 |
| Rhode Island | ||
| Jamestown/Middletown/Newport | Newport | October 1 – October 31 and June 1 – September 30 |
| South Carolina | ||
| Charleston | Charleston, Berkeley, and Dorchester | October 1 – September 30 |
| Hilton Head | Beaufort | March 1 – August 31 |
| Myrtle Beach | Horry | June 1 – August 31 |
| Tennessee | ||
| Nashville | Davidson | October 1 – September 30 |
| Utah | ||
| Moab | Grand | October 1 – October 31 and March 1 – September 30 |
| Park City | Summit | October 1 – September 30 |
| Virginia | ||
| Virginia Beach | City of Virginia Beach | June 1 – August 31 |
| Wallops Island | Accomack | July 1 – August 31 |
| Washington, D.C. Metropolitan Area | Cities of Alexandria, Falls Church, and Fairfax; Counties of Arlington and Fairfax | October 1 – June 30 and September 1 – September 30 |
| Vermont | ||
| Manchester | Bennington | October 1 – October 31 and August 1 – September 30 |
| Montpelier | Washington | October 1 – October 31 and August 1 – September 30 |
| Washington | ||
| Port Angeles/Port Townsend | Clallam and Jefferson | July 1 – August 31 |
| Seattle | King | October 1 – October 31 and May 1 – September 30 |
| Wyoming | ||
| Cody | Park | June 1 – September 30 |
| Jackson/Pinedale | Teton and Sublette | October 1 – September 30 |
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 of Notice 2022-44.
a. The following localities have been added to the list of high-cost localities: Yosemite National Park, California; Tampa/St. Petersburg, Florida; Atlanta, Georgia; Missoula, Montana; Saratoga Springs/Schenectady, New York; Eugene/Florence, Oregon; Montpelier, Vermont.
b. The following localities have changed the portion of the year in which they are high-cost localities: San Diego, California; District of Columbia (see also Maryland and Virginia); Fort Lauderdale, Florida; Fort Myers, Florida; Fort Walton Beach/DeFuniak Springs, Florida; Miami, Florida; Vero Beach, Florida; Portland, Maine; Washington, D.C. Metropolitan Area in Maryland (Counties of Montgomery and Prince George’s); Hilton Head, South Carolina; Manchester, Vermont; Washington, D.C. Metropolitan Area in Virginia (Cities of Alexandria, Falls Church, and Fairfax; Counties of Arlington and Fairfax); Seattle, Washington.
c. The following localities have been removed from the list of high-cost localities: Los Angeles, California; Durango, Colorado; Portland, Oregon; Vancouver, Washington.
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, 2023, for travel away from home on or after October 1, 2023. 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, 2023. See sections 4.06 and 5.04 of Rev. Proc. 2019-48 (or successor) for transition rules for the last 3 months of calendar year 2023.
SECTION 7. EFFECT ON OTHER DOCUMENTS
Notice 2022-44 is superseded.
DRAFTING INFORMATION
The principal author of this notice is C. Dylan Durham of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this notice contact Mr. Durham at (202) 317-7005 (not a toll-free number).