2026-2027 Special Per Diem Rates — High-Low $329 / $230
IRS Notice 2026-60 rates effective Oct 1, 2026. Transportation M&IE $80/$86, high-low $329/$230, incidental $5, transition rules for late 2026, and locality list changes.
By Greg, Editor at Finance Maxx. Published · Updated
IRS Notice 2026-60 sets the 2026-2027 special per diem rates used to substantiate ordinary and necessary travel expenses away from home. It supersedes Notice 2025-54 and must be used with the rules in Rev. Proc. 2019-48 (or a successor).
This guide is for self-employed travelers, transportation workers using the special M&IE rates, and employers updating accountable-plan rates before October 1, 2026. Figures below come only from Notice 2026-60. Confirm the official PDF before you change payroll or file.
What changed
Effective for travel and allowances on or after October 1, 2026, the notice updates three pieces:
- Special transportation industry M&IE rates
- The incidental-expenses-only deduction rate
- High-low substantiation rates and the high-cost locality list
| Method | Notice 2025-54 (prior) | Notice 2026-60 (new) |
|---|---|---|
| High-low lodging + M&IE | $319 high / $225 other CONUS | $329 high / $230 other CONUS |
| Meal portion of high-low (§274(n)) | $86 high / $74 low | $86 high / $74 low (unchanged) |
| M&IE-only high-low | $86 / $74 | $86 / $74 |
| Transportation special M&IE | (prior notice) | $80 CONUS / $86 OCONUS |
| Incidental expenses only | (prior notice) | $5 per day CONUS or OCONUS |
| High-cost locality threshold | federal per diem ≥ prior threshold | federal per diem $280 or more |
Lodging-plus-meals high-low rose $10 on the high rate and $5 on the other-CONUS rate. Meal portions stayed flat.
Rate tables you can use
Transportation industry special M&IE
| Locality | Daily M&IE |
|---|---|
| CONUS | $80 |
| OCONUS | $86 |
Incidental expenses only
| Locality | Daily rate |
|---|---|
| Any CONUS or OCONUS | $5 |
High-low substantiation (CONUS)
| Category | High-cost locality | Other CONUS locality |
|---|---|---|
| Lodging + M&IE | $329 | $230 |
| Treated as meals for §274(n) | $86 | $74 |
| M&IE only | $86 | $74 |
A locality is “high-cost” when its federal per diem is $280 or more for the portion of the year listed in the notice.
Who can use these rates
Under Rev. Proc. 2019-48, the special rates help substantiate the amount of travel expenses for:
- Employers reimbursing employees under an accountable plan
- Self-employed individuals and other taxpayers computing a deduction for M&IE (or incidentals only) while traveling away from home
- Transportation-industry taxpayers eligible for the special CONUS/OCONUS M&IE rates in section 4.04 of that revenue procedure
Unreimbursed employee miscellaneous itemized deductions remain generally disallowed for most W-2 employees under §67(g) (made permanent in recent law). Narrow above-the-line exceptions still exist for some groups (for example, certain reservists and qualified performing artists), but for a typical employee the practical path is an accountable-plan reimbursement — not a Schedule A write-off of unreimbursed per diem. Self-employed travelers and employers updating plans are the core audience here.
This is educational, not tax advice. Your facts, records, and method elections matter.
High-low vs transportation special M&IE
They are different tools:
- High-low simplifies CONUS lodging-plus-meals (or M&IE-only) into two rates. You must use the notice’s high-cost list for the right portion of the year.
- Transportation special M&IE is a flat $80 / $86 meal-and-incidentals rate for eligible transportation-industry travel. It does not replace lodging substantiation by itself.
- Incidentals only ($5) is for taxpayers who deduct only incidental expenses and not meals.
You still need to follow Rev. Proc. 2019-48 on who may use each method, how partial days work, and when actual expenses or federal per diem tables apply instead.
Transition rules for late 2026
Section 6 of Notice 2026-60 points to Rev. Proc. 2019-48 §§4.06 and 5.04 for the last three months of calendar year 2026:
- If you used a per diem or high-low method in the first nine months of 2026, you may keep Notice 2025-54 rates through December 31, 2026 or switch to Notice 2026-60 from October 1 — but you must apply that choice consistently.
- If you used the special transportation industry M&IE rates in the first nine months, you must continue those special rates through December 31, 2026 (you do not flip mid-year to a different special-rate set).
After year-end, plan on the Notice 2026-60 figures for travel on or after October 1, 2026 going forward under the notice’s effective-date rules.
Locality list changes (examples only)
Compared with Notice 2025-54:
Added as high-cost localities: Tucson, Arizona; San Mateo/Foster City/Belmont, California; Albuquerque, New Mexico; Cody, Wyoming.
Removed: Panama City, Florida.
Seasonal window changes (examples — not the full list): Napa, CA; South Lake Tahoe, CA; Yosemite National Park, CA; Aspen, CO; Steamboat Springs, CO; Telluride, CO; Fort Myers, FL; Falmouth, MA; Toms River, NJ; New York City, NY; Philadelphia, PA; Hilton Head, SC; Manchester, VT; Montpelier, VT; Port Angeles/Port Townsend, WA. Sun Valley/Ketchum, ID has a correction to its high-cost portion of the year.
Do not rely on this summary for payroll. Pull the full key-city / county / portion-of-year table from IRS Notice 2026-60.
A number you can run
This site does not have a dedicated per diem calculator. Use the federal tax calculator as a planning shortcut for the meal-deduction effect for a self-employed traveler (Schedule C style), not as lodging substantiation software.
Assumptions for a planning sketch only:
- Self-employed, travels 20 high-cost CONUS days after October 1, 2026
- Uses M&IE-only high-low: $86 per day
- Applies the usual 50% meal limitation under §274(n) (confirm your facts — some narrow exceptions exist)
- Marginal federal income-tax rate 24% for illustration
Math:
- Gross M&IE claimed for substantiation/deduction starting point: 20 × $86 = $1,720
- After 50% §274(n): $860 deductible meal portion
- Rough federal tax effect at 24%: about $206
That is the income-tax effect of the deductible slice, not a reimbursement check. Lodging, partial days, actual receipts, state tax, and self-employment tax interactions will change the result. Employers reimbursing under an accountable plan care about the full high-low allowance ($329 / $230) and how much of it is treated as meals for payroll and §274(n) tracking.
Transportation example, stated assumptions: 22 CONUS travel days, special M&IE $80/day, 50% meal limit, 22% marginal rate.
- Starting M&IE: 22 × $80 = $1,760
- After 50%: $880
- Rough federal tax effect at 22%: about $194
Related reading
- How federal tax brackets work — context for the planning shortcut above
- Itemize or take the standard deduction — why unreimbursed employee travel rarely helps on Schedule A for most W-2 workers
- Take-home pay and FICA — payroll side when employers reimburse travel
What this does not do
- It does not replace Rev. Proc. 2019-48 or the official locality table.
- It does not restore a broad unreimbursed employee miscellaneous deduction for most W-2 workers.
- It does not set state per diem rules or union contract rates.
- It does not decide whether you must use high-low, special transportation M&IE, federal locality rates, or actual expenses.
- Meal portions still face §274(n) unless an exception applies.
- It is educational, not payroll setup and not advice.
FAQ
When do the Notice 2026-60 rates start?
For per diem allowances paid on or after October 1, 2026 for travel away from home on or after that date. For computing the deduction amount for meals and incidentals (or incidentals only), the notice applies to amounts paid or incurred on or after October 1, 2026.
Can I keep using Notice 2025-54 rates after October 1, 2026?
For the last three months of calendar year 2026, taxpayers who used a per diem or high-low method in the first nine months may keep Notice 2025-54 rates through December 31, 2026 or switch to Notice 2026-60 from October 1 — but must apply the choice consistently under Rev. Proc. 2019-48 §§4.06 and 5.04. Special transportation M&IE rates used in the first nine months must continue through December 31, 2026.
What are the new high-low rates compared with last year?
Lodging-plus-M&IE high-low rises to $329 for high-cost localities and $230 for other CONUS localities (from $319 / $225 under Notice 2025-54). The meal portions for §274(n) stay $86 high / $74 low. M&IE-only high-low is also $86 / $74.
What is the special transportation industry M&IE rate?
$80 per day for CONUS travel and $86 per day for OCONUS travel. The incidental-expenses-only rate is $5 per day for any CONUS or OCONUS locality.
Which localities were added or removed for 2026-2027?
Added as high-cost localities — Tucson, AZ; San Mateo/Foster City/Belmont, CA; Albuquerque, NM; Cody, WY. Removed — Panama City, FL. Many cities also changed their seasonal high-cost windows. Use the full list in IRS Notice 2026-60 rather than this summary.
Try it yourself
- Read IRS Notice 2026-60 for the full high-cost locality table and effective-date language.
- Decide whether high-low, special transportation M&IE, or another allowed method fits your facts under Rev. Proc. 2019-48.
- For a self-employed meal-deduction sketch, open the federal tax calculator with and without the estimated deductible M&IE slice (after §274(n)).
- Employers: update accountable-plan rate tables before allowances paid on or after October 1, 2026, and document any late-2026 transition election.