The special per-diem rates for the fiscal year running from October 1, 2021 to September 30, 2022 has been released in Notice 2021-52.[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, 2021 to September 30, 2022 are $69 for any locality of travel in the continental United States (CONUS) and $74 for any locality outside the continental United States (OCONUS).[3]

The rate for incidental expenses for the period from October 1, 2021 to September 30, 2022 for the incidental expenses only deduction is $5 per day.[4]

For those using the high-low substantiation method, the rates will be $296 for any high cost locality and $2020 to any other location within CONUS (which is a decrease from the prior year).  Of that amount, $74 is treated as paid for meals and incidentals to a high cost locality and $64 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 Hilton Head, South Carolina has been added to the list of high cost localities for the 2021/2022 fiscal year.[6]

As well, the following locations are having modifications made to the portion of the year they qualify for high cost status for the 2021/2022 fiscal year:

Sedona, Arizona[7] and Jamestown/Middletown/Newport, Rhode Island.[8]

Gulf Breeze, Florida has been removed from the high cost list for 2021/2022.[9]

[1] Notice 2021-52, September 3, 2021, https://www.taxnotes.com/research/federal/irs-guidance/notices/irs-publishes-special-per-diem-rates-for-2021-2022/783b3 (retrieved September 7, 2021)

[2] Notice 2021-52, Section 1

[3] Notice 2021-52, Section 3

[4] Notice 2021-52, Section 4

[5] Notice 2021-52, Section 5.1

[6] Notice 2021-52, Section 5.3.a

[7] The change to Sedona, Arizona is effective for allowances paid to any employee on or after October 1, 2020, for travel away from home on or after October 1, 2020 (Notice 2021-52, Section 6)

[8] Notice 2021-52, Section 5.3.b and Section 6

[9] Notice 2021-52, Section 5.3.c