How Much Can You Claim for Food Allowance: Per Diem Rates and the 50% Rule

If you’re traveling for business, the federal per diem system lets you claim $74 per day for meals and incidental expenses in standard locations or $86 per day in designated high-cost cities, and that answers the core of how much you can claim for food allowance on a work trip.¹ Only 50 percent of that amount is actually deductible, so a $74 daily rate produces a $37 tax benefit.² What you can actually put on a return depends on whether you’re self-employed or a W-2 employee, where you traveled, and which method you pick.

Can You Claim Anything at All

Before the rate matters, you have to be someone the tax code lets deduct meals. That mostly comes down to how you’re paid.

If you’re self-employed or an independent contractor, yes. You deduct business meals on Schedule C using either actual receipts or the standard meal allowance, then apply the 50 percent cap.³ The per diem shortcut is available for meals only. Lodging still requires actual receipts.⁴

If you’re a W-2 employee, generally no. The Tax Cuts and Jobs Act suspended the deduction for unreimbursed employee business expenses, and Public Law 119-21 made that suspension permanent.⁵ Four narrow groups can still file Form 2106 for unreimbursed expenses: Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses.⁶ Everyone else is dependent on what their employer pays them, not what they can write off. The employer reimbursement rules below matter more than the deduction rules for most employees.

Which Trips Qualify

You can only claim a food allowance when you travel away from your tax home, which the IRS defines as the entire city or general area where your main place of business sits — not necessarily where you live. If you commute an hour and a half to work in a different city, that different city is your tax home. When you work in multiple locations, the IRS weighs time spent at each, level of business activity, and income earned from each, with time carrying the most weight.⁷

The trip also has to be long enough that you need sleep or rest to keep working. A same-day out-and-back where you grab lunch doesn’t qualify. The IRS is explicit: napping in your car doesn’t count, and a brief stop to eat at a turnaround point isn’t sufficient rest. You don’t have to be gone literally overnight, but your time off duty must be long enough for genuine sleep or rest.⁸

Actual Costs or Standard Meal Allowance

Once a trip qualifies, you pick one method for the whole trip.⁸

The actual cost method means you keep every meal receipt and deduct 50 percent of what you spent. This works if you eat cheaply on the road, or if the per diem rate for your destination wouldn’t cover your real spending.

The standard meal allowance, also called the per diem method or M&IE rate, gives you a fixed daily amount without individual meal receipts. Incidental expenses in this context mean tips for porters, baggage carriers, and hotel staff. They do not include laundry, phone calls, or transportation between your hotel and restaurants.⁸ You still need a travel log with dates, destinations, and business purpose. You just skip the restaurant receipts.

You can switch methods from one trip to the next. You cannot mix methods within the same trip.

Current Per Diem Rates

The General Services Administration publishes location-specific M&IE rates for the continental United States. A standard rate covers most locations, and roughly 300 non-standard areas get higher rates to reflect local dining costs. Some destinations carry seasonal adjustments.⁹¹⁰¹¹

If you travel to several cities and don’t want to look up each rate, the IRS high-low method collapses everything into two tiers. Under IRS Notice 2025-54, the M&IE-only rates for the period beginning October 1, 2025 are $86 per day in high-cost localities and $74 per day everywhere else in the continental U.S.¹ These rates run through September 30, 2026, though employers can begin using them as early as January 1, 2026. The underlying substantiation rules sit in Revenue Procedure 2019-48.¹²

The 50 Percent Cut

Whichever method you choose, you can generally deduct only 50 percent of your meal expenses.² At the $74 per diem rate, your deduction is $37. If you spent $60 on actual meals, you deduct $30. The meals also must not be “lavish or extravagant under the circumstances,” though the IRS doesn’t publish a specific dollar cap for that test. A temporary 100 percent deduction for restaurant meals applied only during 2021 and 2022 and has since returned to 50 percent.¹³

The 80 Percent Rate for Transportation Workers

Workers subject to Department of Transportation hours-of-service rules get a better percentage. Long-haul truck drivers, interstate bus drivers, airline pilots, and similar transportation workers deduct 80 percent of meal expenses rather than 50 percent.¹⁴ The higher rate applies only to meals eaten away from home during or connected to a duty period governed by DOT hours-of-service limits. A trucker eating dinner at a rest stop mid-haul qualifies. The same driver eating lunch at a local meeting doesn’t.

Partial Travel Days

On the day you leave and the day you return, the allowable M&IE amount drops to 75 percent of the full daily rate.¹⁵ At a $74 M&IE rate, that’s $55.50 for departure day and $55.50 for return day, with full $74 days in between. The 50 percent deduction limit still applies on top of the proration. Your travel log should clearly mark partial days, because the IRS expects prorated amounts to line up with documented departure and return dates.

How Employer Reimbursements Work

Since most W-2 employees can’t deduct meals themselves, what your employer pays is the real food allowance question. The tax treatment turns on whether the plan is accountable or nonaccountable.⁸

An accountable plan keeps reimbursements tax-free. It has to meet three requirements: the expenses relate to services performed as an employee (business connection); you report dates, locations, and business purpose to your employer within a reasonable time (adequate accounting); and you return any amount that exceeded your substantiated expenses within a reasonable time (excess return).

When per diem paid under an accountable plan doesn’t exceed the federal rate, it stays off your W-2 entirely. If your employer pays more than the federal rate, the excess shows up on your W-2 as taxable wages in box 1, while the portion up to the federal rate is reported under code L in box 12 and isn’t taxed.¹⁶

Under a nonaccountable plan, the whole reimbursement is treated as wages. It goes into box 1 of your W-2, and you pay income tax and payroll taxes on all of it.⁸ Any reimbursement setup that doesn’t require accounting or return of excess is a nonaccountable plan by default.

Records You Need

Per diem eliminates individual meal receipts. It doesn’t eliminate recordkeeping. For every trip, keep a contemporaneous log covering four things:⁸

Amount: the per diem rate used, or each actual meal expense if using actual costs.
Time: dates you left and returned, and the number of business days.
Place: the city or area you traveled to.
Business purpose: why the trip was necessary. A written explanation isn’t required if the reason is obvious from the circumstances, but having one protects you.

Contemporaneous is the word that matters. A log reconstructed from memory months later carries less weight than one filled in during the trip. The IRS doesn’t prescribe a format; a spreadsheet, notes app, or printed diary is fine, as long as entries were made at or near the time of travel.

Inadequate records let the IRS disallow the deduction entirely. A negligence-related underpayment on top of that triggers a penalty of 20 percent of the tax shortfall, plus interest.¹⁷ Keep records at least three years after filing, the standard limitations period for most taxpayers.¹⁸

Where It Goes on the Return

Self-employed filers report deductible meals on Schedule C, line 24b, entering the amount after applying the 50 percent limit (or 80 percent for qualifying transportation workers). Lodging and other travel expenses go on line 24a at 100 percent.¹⁹

The narrow group of employees who still qualify for unreimbursed expense deductions use Form 2106 to calculate the amount, which flows to Schedule 1. The Form 2106 instructions list the qualifying groups explicitly if you’re not sure.⁶

Employees who receive per diem under an accountable plan that stays within the federal rate report nothing on their personal return. The employer does the reporting, and none of it shows up as income.

1
Internal Revenue Service. IRS Notice 2025-54: 2025-2026 Special Per Diem Rates
2
Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses
3
Internal Revenue Service. 2025 Instructions for Schedule C (Form 1040) – Profit or Loss From Business
4
Internal Revenue Service. Per Diem Payments Frequently Asked Questions
5
Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
6
Internal Revenue Service. Instructions for Form 2106 (2025)
7
Internal Revenue Service. Business Travel Expenses
8
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
9
U.S. General Services Administration. Per Diem Rates
10
U.S. Department of State. Office of Allowances
11
Defense Travel Management Office. Per Diem
12
Internal Revenue Service. Rev. Proc. 2019-48
13
Internal Revenue Service. Here’s What Businesses Need to Know About the Enhanced Business Meal Deduction
14
Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses – Section: Special Rule for Individuals Subject to Federal Hours of Service
15
U.S. General Services Administration. Frequently Asked Questions, Per Diem
16
Internal Revenue Service. Publication 15-B (2026), Employer’s Tax Guide to Fringe Benefits
17
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments
18
Internal Revenue Service. How Long Should I Keep Records?
19
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses – Section: Where To Report