The special per-diem rates for the fiscal year running from October 1, 2020 to September 30, 2021 has been released in Notice 2020-71.[1] The special rates governed by this Notice are:

The special transportation industry meal and incidental expenses (M&IE) rates,
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.[2]

The special meals and incidental expense rates for the transportation industry for the period from October 1, 2020 to September 30, 2021 are $66 for any locality of travel in the continental United States (CONUS) and $71 for any locality outside the continental United States (OCONUS).[3]

The rate for incidental expenses for the period from October 1, 2020 to September 30, 2021 for the incidental expenses only deduction is $5 per day.[4]

For those using the high-low substantiation method, the rates will be $292 for any high cost locality and $198 to any other location within CONUS (which is a decrease from the prior year). Of that amount, $71 is treated as paid for meals and incidentals to a high cost locality and $60 for travel to any other locality within CONUS.[5]

The list of high cost localities can be found at Section 5.2 of the Notice.

The notice indicates that the following localities have been added to the list for the 2020/2021 fiscal year:

Los Angeles, California; San Diego, California; Gulf Breeze, Florida; Kennebunk/Kittery/Sanford, Maine; Virginia Beach, Virginia.[6]

As well, the following locations are having modifications made to the portion of the year they qualify for high cost status for the 2020/2021 fiscal year:

Sedona, Arizona; Monterey, California; Santa Barbara, California; District of Columbia (see also Maryland and Virginia); Naples, Florida; Jekyll Island/Brunswick, Georgia; Boston/Cambridge, Massachusetts; Philadelphia, Pennsylvania; Jamestown/Middletown/Newport, Rhode Island; Charleston, South Carolina.[7]

Finally, the following localities have been removed from the high cost list for 2020/2021:

Midland/Odessa, Texas; Pecos, Texas.[8]

[1] Notice 2020-71, September 11, 2020, https://www.irs.gov/pub/irs-drop/n-20-71.pdf (retrieved September 11, 2020)

[2] Notice 2020-71, Section 1

[3] Notice 2020-71, Section 3

[4] Notice 2020-71, Section 4

[5] Notice 2020-71, Section 5.1

[6] Notice 2020-71, Section 5.3.a

[7] Notice 2020-71, Section 5.3.b

[8] Notice 2020-71, Section 5.3.c