IRS sets per diem rates for travelers for 2026-2027

Key insight: See how the IRS changed the high-low substantiation rates for travel.
What's at stake: Taxpayers trying to maximize deductions for business travel under the newly adjusted IRS rates.
Forward look: Get ready for the special per diem rates taking effect on Oct. 1, 2026.

The Internal Revenue Service issued its annual notice setting the daily rates that business travelers can use when deducting their expenses.

Notice 2026-60 announces the special per diem rates taking effect on Oct. 1, 2026. Taxpayers can use them to substantiate the amount of expenses for lodging, meals and incidental expenses when traveling away from home. The notice details 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.

The special meals and entertainment rates for taxpayers in the transportation industry are $80 for any travel within the continental United States and $86 for any travel outside the continental United States, the same rates as last year. 

The rate for any travel locale inside or outside the continental U.S. for the incidental expenses only deduction is $5 per day. 

For purposes of the high-low substantiation method, the per diem rates in lieu of the rates described in last year's Notice 2025-54 (the per diem substantiation method) are $329 for travel to any high-cost locality and $230 for travel to any other locality within the continental U.S. (That's up from $319 and $225, respectively, last year.) The amount of the $329 high rate and $230 low rate that is treated as paid for meals for purposes of Section 274(n) of the Internal Revenue Code is $86 for travel to any high-cost locality and $74 for travel to any other locality within the continental United States (the same as last year). 

The per diem rates in lieu of the rates described in Notice 2025-54 (the meal and incidental expenses only substantiation method) are $86 for travel to any high-cost locality and $74 for travel to any other locality within the continental U.S. 

The notice includes a list of high-cost localities with a federal per diem rate of $280 or more.

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