August 6, 2021
Trucker Per Diem Explained
Trucker Per Diem Explained
What is per diem?
Per diem is the allowance for lodging (excluding taxes), meals and incidental expenses. The General Services Administration (GSA) establishes per diem rates for destinations within the lower 48 Continental United States (CONUS). The State Department establishes the foreign rates (for example, Canada). The Department of Defense (DOD) establishes non-foreign rates which includes Alaska, Hawaii, and all U.S. Territories. For more information on non-foreign rates, visit DOD's Per Diem, Travel, and Transportation Allowance Committee at www.defensetravel.dod.mil and foreign rates can be found at http://aoprals.state.gov.
This eliminates the need for proving actual costs for meals & incidental expenses incurred.
Are taxes and gratuity (tips) included in the Meals and Incidental (M&IE) expense rate?
Yes, the meals and incidental expense (M&IE) rate does include taxes and tips in the rate, so truckers cannot separately deduct these expenses.
Do I have to spend all the per diem?
No. This is the maximum amount the IRS will let you claim on your tax return.
Who can claim trucker per diem?
Self-employed truckers who are subject to DOT HOS and who travel away from home overnight where sleep or rest is required.
- As of January 1, 2018 employee (company) drivers can no longer claim per diem on their Form 1040, US Income Tax Return, as an itemized deduction on Schedule A.
Can all truck drivers receive per diem?
No. Drivers who start and end a trip at home on the same DOT HOS 14-hour workday cannot claim per diem.
What qualifies as a tax home?
First, truck drivers must have a tax home. The IRS considers a tax home to be the entire city or general area where you conduct business or work, regardless of where you maintain your home.
If you work in more than one place as a truck driver, the IRS considers your tax home to be the general area of your principal place of business or work.
Where you come home to. Your regular place of business, or home in a real and substantial sense.
Can I claim per diem if I live in my truck?
No. A taxpayer who’s constantly in motion is a "turtle" or someone with no fixed residence who carries their “home” with them.
Different trucker social media forums will have you believe if you have a P.O. Box, it would be considered a “tax Home”. Unfortunately, that is not true. The IRS looks at your cost included in your “tax home” and the amount of time that you spend there. For a self-employed truck who lives in their truck, some amount of expenses must be incurred to maintain a tax home. It would also be important to indicate the number of days at your tax home. Our per diem tracking app will allow you to track full days, partial day and tax home days.
Can truck drivers claim a mileage allowance per diem?
No. Only fleets can use a cents-per-mile per diem. IRS’ standard mileage allowance is for use of a personal vehicle.
Can a driver claim per diem for lodging?
No. You must have a receipt for all lodging expenses. The lodging per diem rates are a maximum amount; the trucker only receives actual lodging costs up to that maximum rate. The lodging rate are used to determine if the lodging cost is excessive by IRS standards. A self-employed driver falls under the related party rules of IRC 267(b) & Rev. Proc 2011-47.6.07 and, therefore, cannot use per diem substantiation for lodging cost. You must have receipts for all lodging expenses and the IRS will only except expenses up to the lodging rate for that location.
IRS per diem substantiation requirements
Meals and Incidentals
Truckers can track the full and partial days to be able to use the per diem rate for meals and incidentals.
Truckers MUST keep receipts for lodging to be able to take that expense. Be prepared to explain why the truck was not available (i.e., down for repair, etc.)
What published guidance has the IRS issued that explains trucker per diem?
IRS Rev. Proc. 2011-47 (most recently superseded by IRB 2017-42) & IRC 162(a)(2); Reg 1.162-2) A tax deduction is allowed for ordinary and necessary traveling expenses incurred by a taxpayer while away from home in the conduct of a trade or business. A truck driver is not away from home unless his or her duties require the individual to be away from the general area of his or her tax home for a period substantially longer than an ordinary workday and it is reasonable to need rest or sleep.
HATEM ELSAYED, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 8935-07S. Filed May 26, 2009
Company-paid per diem
Can motor carriers pay per diem to employee drivers?
Yes. A motor carrier can offer per diem to drivers subject to DOT HOS and who travel away from home overnight where sleep or rest is required under an accountable per diem plan.
Is company-paid per diem taxable as income to an employee driver under an accountable fleet per diem plan?
Not under an accountable plan. Per diem is classified as a non-taxable reimbursement to an employee driver.
Trucker per diem rates
What are the current per diem rates for travel in USA & Canada?
IRS increased per diem rates effective October 1, 2018:
- USA $66 from $63
- Canada $71 from $68
Can a driver prorate per diem for partial days of travel?
Yes. A partial day is 75% of the per diem rate.
- Partial per diem rate USA $49.50, Canada $53.25
- Per Diem Plus will record 3/4 per diem when a driver departs their tax home BEFORE noon or returns to their tax home AFTER noon.
How much per diem can I deduct on my income tax return?
A self-employed trucker can deduct 80% of per diem on their income tax return.
- Use Schedule C, Profit / Loss from Business, or
- Form 1120S - Line 19 "Other Deductions"
Incidental expenses
What are Incidental Expenses?
Only fees and tips.
Are showers & parking fees incidental expenses?
No. Self-employed drivers may separately deduct expenses for: Per Diem Plus subscription, showers, reserved parking fees, mailing expenses, supplies and laundry.
Can employee drivers deduct company-paid per diem on their tax return?
No.
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