Per Diem W-2 Reporting

Per Diem W-2 Reporting
••• tax forms image by Chad McDermott from Fotolia.com

You typically do not need to report per diems, money allotted for normal expenses incurred during business travel, on your W-2, according to the Internal Revenue Service. If you have extra left over, you will need to report this as income.

Identification

The IRS allows you to consider anything up to the federal per diem rate non-taxable income. The amount changes from year to year and by expense and location. People in high-cost areas could receive up to $256 in 2010, while low-cost areas had a federal rate of $158.

Considerations

You must perform adequate accounting for all expenses up to the federal per diem limit, according to the IRS. If the employee does not return any excess per diem, even if he spends less than the federal limit, the employer must report this on a W-2.

 

Tip

You can only spend up to $58 on meals and other expenses in high-cost areas. Follow IRS publication 1542 for updated federal per diem rates.