The IRS has created a page on IRS.gov for information about Publication 1542, at www.irs.gov/pub1542. Information about any future developments affecting Publication 1542 (such as legislation enacted after we release it) will be posted on that page.

This publication is for employers who pay a per diem allowance to employees for business travel away from home within the continental United States (CONUS) (the 48 contiguous states), on or after October 1, 2010, and before January 1, 2011. It gives the maximum per diem rate you can use without treating part of the per diem allowance as wages for tax purposes. For a detailed discussion on the tax treatment of a per diem allowance, see chapter 11 of Publication 535, Business Expenses, or Revenue Procedure 2011-47, 2011-42 I.R.B. 520, which can be found on the Internet at www.irs.gov/irb/2011-42_IRB/ar12.html.

You will find links to per diem rates at www.gsa.gov/perdiem, including links to:

• CONUS per diem rates;
• Per diem rates for areas outside the continental United States (OCONUS), such as Alaska, Hawaii, Puerto Rico, and U.S. possessions; and
• Foreign per diem rates.

Publication 1542 is available only on the Internet at IRS.gov. Print copies can no longer be ordered.

During the year, as changes to the federal per diem rates (updates) are announced by the General Services Administration (GSA), we will incorporate the changes into Publication 1542. An article on IRS.gov will alert you to which locations have updated rates. To reach these articles, go to www.irs.gov/formspubs and click on "Changes to Current Tax Products," under Important Changes. You will find the new rates in Table 4.

We will also incorporate mid-year changes to the high-low rates into Publication 1542. You will be alerted to these changes by a similar article on IRS.gov and can find the changes in Table 2 of the revised publication.

The annual changes, both federal per diem and high-low rates, will be incorporated into the publication as soon as possible after being announced by GSA and the IRS. The annual issue of the publication should be available each year in mid- to late-October.

We welcome your comments about this publication and your suggestions for future editions.

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If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.

This section contains information about the per diem rate substantiation methods available and the choice of rates you must make for the last 3 months of the year.

The tables in this publication reflect the high-low substantiation method and the regular federal per diem rate method.

Tables 1 and 2 in this publication list the localities that are treated under the high-low substantiation method as high-cost localities for all or part of the year. Table 1 lists the localities that are eligible for $233 ($65 meals and incidental expenses (M&IE)) per diem, effective October 1, 2010. For travel on or after October 1, 2010, all other localities within CONUS are eligible for $160 ($52 M&IE) per diem under the high-low method.

Table 2 lists the localities that are eligible for $242 ($65 M&IE) per diem, effective October 1, 2011. For travel on or after October 1, 2011, the per diem for all other localities decreases to $163 ($52 M&IE).

Tables 3 and 4 give the regular federal per diem rates published by the General Services Administration (GSA). Both tables include the separate rate for meals and incidental expenses (M&IE) for each locality. The rates listed in Table 3 are effective October 1, 2010; those in Table 4 are effective October 1, 2011. The standard rate for all locations within CONUS not specifically listed in Table 3 is $123 ($77 for lodging and $46 for M&IE). For Table 4, this rate is $123 ($77 for lodging and $46 for M&IE).

The transition period covers the last 3 months of the calendar year, from the time that new rates are effective (generally October 1) through December 31. During this period, you generally may change to the new rates or finish out the year with the rates you had been using.

If you use the high-low substantiation method for an employee, when new rates become effective (generally October 1) you can either continue with the rates you used for the first part of the year or change to the new rates. However, you must continue using the high-low method for that employee for the rest of the calendar year (through December 31). Also, you must use the same rates for all employees reimbursed under the high-low method during that calendar year.

For example, Employee A travels extensively during March and April of 2012, and you determine A's travel allowance (reimbursement) using the high-low method (Table 2). Employee A does not travel again until November 2012. For A's November trip and any others during the remainder of 2012, you may continue using the same set of rates (Table 2) or change to the new rates that generally will be effective in October. Assume that two of your other employees, B and C, are also reimbursed under the high-low method—your choice of rates must also apply to them.

For Employee A's travel on or after January 1, 2013, you must use the rates in effect for 2013, but may either continue with the high-low method or choose the regular federal per diem rate method. The choice of method stays in effect for the entire 2013 calendar year.

The new rates and localities for the high-low method are included each year in a revenue procedure that is generally published in mid- to late-September. You can find the revenue procedure in the weekly Internal Revenue Bulletin (IRB) on the Internet at www.irs.gov/irb.

New CONUS per diem rates become effective on October 1 of each year and remain in effect through September 30 of the following year. Employees being reimbursed under the per diem rate method during the first 9 months of a year (January 1–September 30) must continue under the same method through the end of that calendar year (December 31). However, for travel by these employees from October 1 through December 31, you can choose to continue using the same per diem rates or use the new rates. Your choice applies to all employees reimbursed under the per diem rate method during that calendar year. Just as for the high-low method, you must continue using the same method for an employee for the entire calendar year.

For example, Employees P and Q attend an industry conference in February 2012, and you reimburse their expenses using the per diem rate method (Table 4). Employee P attends other conferences in July (reimbursed using Table 4) and December 2012, while Employee Q's only other travel occurs in October 2012. When determining Q's travel allowance for the October travel, you must decide whether to continue with the old (Table 4) rates or adopt the new ones effective October 1, 2012. Your choice of rates will also apply to Employee P's December travel. Both employees must continue being reimbursed under the per diem rate method for travel through December 31, 2012. You can choose a new method for either or both employees; this choice will become effective on January 1, 2013.

The new federal CONUS per diem rates are published each year, generally early in September, on the Internet. Go to www.gsa.gov/perdiem.