MARGARET JOHNSON/MargJohnsonVA – stock.adobe.com
The Internal Revenue Service, in Notice 2025-54, announces the special per diem rates effective Oct. 1, 2025, which taxpayers may use for expenses for lodging, meals and incidental expenses when traveling away from home.
This notice provides the special transportation industry rate, the rate for the incidental expenses-only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method.
Taxpayers who use per diem rates to substantiate the amount of travel expenses under Rev. Proc. 2019-48 may use the federal per diem rates published annually by the General Services Administration. Rev. Proc. 2019-48 allows certain taxpayers to use a special transportation industry rate or to use rates under a high-low substantiation method for certain high-cost localities. The IRS announces these rates and the rate for the incidental expenses-only deduction in an annual notice.
Use of a per diem substantiation method is not mandatory. A taxpayer may substantiate actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence for proper substantiation.
Notice 2025-54 will be in Internal Revenue Bulletin 2025-41, dated Oct. 6, 2025.
