N-12-63.pdf

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2012-2013 Special Per Diem Rates

Notice 2012-63

SECTION 1. PURPOSE
This annual notice provides the 2012-2013 special per diem rates for taxpayers
to use in substantiating the amount of ordinary and necessary business expenses
incurred while traveling away from home, specifically (1) the special transportation
industry meal and incidental expenses (M&IE) rates, (2) the rate for the incidental
expenses only deduction, and (3) the rates and list of high-cost localities for purposes of
the high-low substantiation method.
SECTION 2. BACKGROUND
Rev. Proc. 2011-47, 2011-42 I.R.B. 520, provides rules for using a per diem rate
to substantiate, under § 274(d) of the Internal Revenue Code and § 1.274-5 of the
Income Tax Regulations, the amount of ordinary and necessary business expenses
paid or incurred while traveling away from home. Taxpayers using the rates and list of
high-cost localities provided in this notice must comply with Rev. Proc. 2011-47. Notice
2011-81, 2011-42 I.R.B. 513, provides the rates and list of high-cost localities for the
period October 1, 2011, to September 30, 2012.
Section 3.02(3) of Rev. Proc. 2011-47 provides that the term “incidental
expenses” has the same meaning as in the Federal Travel Regulations, 41 C.F.R. 300-
3.1, and that future changes to the definition of incidental expenses in the Federal
Travel Regulations would be announced in the annual per diem notice. On September

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7, 2011, the General Services Administration published interim (temporary) regulations
revising the definition of incidental expenses under the Federal Travel Regulations to
include only fees and tips given to porters, baggage carriers, hotel staff, and staff on
ships. Transportation between places of lodging or business and places where meals
are taken, and the mailing cost of filing travel vouchers and paying employer-sponsored
charge card billings, are no longer included in incidental expenses. Accordingly,
taxpayers using per diem rates may separately deduct or be reimbursed for
transportation and mailing expenses.
SECTION 3. SPECIAL M&IE RATES FOR TRANSPORTATION INDUSTRY
The special M&IE rates for taxpayers in the transportation industry are $59 for
any locality of travel in the continental United States (CONUS) and $65 for any locality
of travel outside the continental United States (OCONUS). See section 4.04 of Rev.
Proc. 2011-47.
SECTION 4. RATE FOR INCIDENTAL EXPENSES ONLY DEDUCTION
The rate for any CONUS or OCONUS locality of travel for the incidental
expenses only deduction is $5 per day. See section 4.05 of Rev. Proc. 2011-47.
SECTION 5. HIGH-LOW SUBSTANTIATION METHOD
1. Annual high-low rates
. For purposes of the high-low substantiation method, the
per diem rates in lieu of the rates described in section 4.01 of Rev. Proc. 2011-47 (the
per diem substantiation method) are $242 for travel to any high-cost locality and $163
for travel to any other locality within CONUS. The amount of the $242 high rate and
$163 low rate that is treated as paid for meals for purposes of § 274(n) is $65 for travel
to any high-cost locality and $52 for travel to any other locality within CONUS. See

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section 5.02 of Rev. Proc. 2011-47. The per diem rates in lieu of the rates described in
section 4.02 of Rev. Proc. 2011-47 (the meal and incidental expenses only
substantiation method) are $65 for travel to any high-cost locality and $52 for travel to
any other locality within CONUS.
2. High-cost localities
. The following localities have a federal per diem rate of $202
or more, and are high-cost localities for all of the calendar year or the portion of the
calendar year specified in parentheses under the key city name.
Key city
County or other defined location

Arizona
Sedona City limits of Sedona
(March 1-April 30)

California
Monterey Monterey
Napa Napa
(October 1-November 30 and April 1-September 30)
San Diego San Diego
San Francisco San Francisco
Santa Barbara Santa Barbara
Santa Monica City limits of Santa Monica
Yosemite National Park Mariposa
(June 1-August 31)
Colorado
Aspen Pitkin
(December 1-March 31 and June 1–August 31)
Denver/Aurora Denver, Adams, Arapahoe, and
Jefferson
Steamboat Springs Routt
(December 1-March 31)
Telluride San Miguel
(December 1-March 31)
Vail Eagle
(December 1-August 31)

District of Columbia
Washington D.C. (also the cities of Alexandria, Falls Church, and Fairfax, and the
counties of Arlington and Fairfax, in Virginia; and the counties of Montgomery and
Prince George's in Maryland) (See also Maryland and Virginia)

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Florida
Fort Lauderdale Broward
(January 1-May 31)
Fort Walton Beach/De Funiak Springs Okaloosa and Walton
(June 1-July 31)
Key West Monroe
Miami Miami-Dade
(December 1-March 31)
Naples Collier
(January 1-April 30)

Illinois
Chicago Cook and Lake
(October 1-November 30 and April 1-September 30)

Louisiana
New Orleans Orleans, St. Bernard, Jefferson
and Plaquemine Parishes
(October 1-June 30)

Maine
Bar Harbor Hancock
(July 1-August 31)

Maryland
Baltimore City Baltimore City
(October 1-November 30 and March 1-September 30)
Cambridge/St. Michaels Dorchester and Talbot
(June 1-August 31)
Ocean City Worcester
(June 1-August 31)
Washington, DC Metro Area Montgomery and Prince George’s

Massachusetts
Boston/Cambridge Suffolk, City of Cambridge
Falmouth City limits of Falmouth
(July 1-August 31)
Martha's Vineyard Dukes
(July 1-August 31)
Nantucket Nantucket
(June 1-September 30)

New Hampshire
Conway Carroll
(July 1-August 31)

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New York
Floral Park/Garden City/Great Neck Nassau
Glens Falls Warren
(July 1-August 31)
Lake Placid Essex
(July 1-August 31)
Manhattan (includes the boroughs of Bronx, Kings, New York, Queens,
Manhattan, Brooklyn, the Bronx, Queens Richmond
and Staten Island)
Saratoga Springs/Schenectady Saratoga and Schenectady
(July 1-August 31)
Tarrytown/White Plains/New Rochelle Westchester

North Carolina
Kill Devil Dare
(June 1-August 31)

Pennsylvania
Philadelphia Philadelphia

Rhode Island
Jamestown/Middletown/Newport Newport
(October 1-October 31 and May 1-September 30)

Utah
Park City Summit
(January 1-March 31)

Virginia
Washington, DC Metro Area Cities of Alexandria, Fairfax, and
Falls Church; counties of
Arlington and Fairfax
Virginia Beach City of Virginia Beach
(June 1-August 31)

Washington
Seattle King

Wyoming Teton and Sublette
Jackson/Pinedale
(July 1-August 31)

3. Changes in high-cost localities
. There are no changes in the list of high-cost
localities in this notice from the list of high-cost localities in section 5 of Notice 2011-81.

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SECTION 6. EFFECTIVE DATE
This notice is effective for per diem allowances for lodging, meal and incidental
expenses, or for meal and incidental expenses only, that are paid to any employee on
or after October 1, 2012, for travel away from home on or after October 1, 2012. For
purposes of computing the amount allowable as a deduction for travel away from home,
this notice is effective for meal and incidental expenses or for incidental expenses only
paid or incurred on or after October 1, 2012. See sections 4.06 and 5.04 of Rev. Proc.
2011-47 for transition rules for the last 3 months of calendar year 2012.
SECTION 7. EFFECT ON OTHER DOCUMENTS
Notice 2011-81 is superseded.
DRAFTING INFORMATION
The principal author of this notice is Eric D. Brauer of the Office of Associate
Chief Counsel (Income Tax & Accounting). For further information regarding this notice
contact Mr. Brauer at (202) 622-4970 (not a toll-free call).