n-11-81.pdf

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Part III - Administrative, Procedural, and Miscellaneous

2011-2012 Special Per Diem Rates

Notice 2011-81

SECTION 1. PURPOSE
This annual notice provides the 2011-2012 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 rates (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., 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.
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

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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
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

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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)

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

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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)

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

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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
. The list of high-cost localities in this notice differs
from the list of high-cost localities in section 5.03 of Rev. Proc. 2010-39 (changes listed
by key cities).
a. No localities have been added to the list of high-cost localities.
b. The portion of the year for which the following are high-cost localities has
been changed: Yosemite National Park, California; and Chicago, Illinois.
c. The following localities have been removed from the list of high-cost localities:
Phoenix/Scottsdale, Arizona; South Lake Tahoe, California; Silverthorne/Breckenridge,
Colorado; Riverhead/Ronkonkoma/Melville, New York; and Stowe, Vermont.
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, 2011, for travel away from home on or after October 1, 2011. For

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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, 2011. See sections 4.06 and 5.04 of Rev. Proc.
2011-47 for transition rules for the last 3 months of calendar year 2011.
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).