IRS Updates Transportation Industry Per Diem Rates

The Internal Revenue Service issued Notice 2024-68, updating the special per diem rates under IRC 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, 2024, the transportation industry per diem rates will increase to $80 (currently $69) for any locality of travel within the continental U.S. and $86 (currently $74) for travel outside the continental U.S. Of this amount, 80% is deductible for federal income tax purposes.

Companies currently using per diem programs should review their plans and consider increasing per diem amounts in order to maximize a plan’s benefits. It is also recommended that companies take this opportunity to revisit the policies and procedures surrounding testing and administration of their per diem plan to ensure adherence with the accountable plan rules under IRC Section 62(c).

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.

If you have questions about the use of per diem programs or the newest rate increase, please contact a KSM advisor or complete this form.