- 1). Go to www.gsa.gov/perdiem and enter the city, state and zip code to which the employee is traveling. You can also click on the state where the employee is traveling. This will either bring up a listing of per diem rates for the destination city or state.
- 2). Find your destination and the month in which you will be traveling on the chart. This will give you the per diem rate for lodging. The rate for meals and incidentals remains the same and it is also listed on the chart. If you can't find either your destination city or a nearby city, you can use the standard per diem rate for the state, which is also listed on the chart.
- 3). Multiply your days of travel by the per diem rates. For the first and last day of travel, allow only 75 percent of the meals and incidentals per diem rate. This is what you would have been reimbursed if your company had used the federal per diem rates.
- 4). Subtract the federal per diem reimbursement amount from the travel reimbursement your company used. If the answer is a negative number, you have no tax liability. If the answer is a positive number, then you will owe taxes on that amount. This should agree with the amount shown in box 12 of your W-2 statement.
- 5). Enter the amount from Step 4, if a positive number, on line 21 of Form 1040. It will be added to your income.
- 6). Prepare your taxes. With the excess reimbursement added into your income, your final taxes will reflect the additional income and withholding taxes that the excess reimbursement created.
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