Truck Driver Per Diem: The 80 Percent Rule and How Audits Go Wrong

Per diem is the biggest single deduction on many owner-operators' returns. It is also the one that falls apart fastest in an audit. Not because the rate is wrong. Because the driver cannot prove the days.

Here is how meal per diem works for truckers, who can use it, and what an examiner will ask you to show.

The 80 percent rule

Business meals are generally limited to 50 percent under IRC 274(n)(1). Drivers get a better deal. IRC 274(n)(3) says that for food and beverages consumed while away from home by an individual during, or incident to, a period of duty subject to the Department of Transportation hours of service limitations, the 50 percent limit becomes 80 percent.

That applies to interstate truck drivers who are subject to DOT hours of service rules. It is a meal rule only. Lodging, when you pay for it, is a travel expense governed by the general rules.

The special transportation industry rate

You can deduct actual meal costs if you keep receipts. Most drivers do not. Rev. Proc. 2019-48 lets self-employed individuals deduct a standard meal and incidental expense (M&IE) amount for each day or partial day away from home instead, under section 4.03 of that revenue procedure.

Section 4.04 adds a special rule for the transportation industry. You qualify only if your work (a) directly involves moving people or goods by airplane, barge, bus, ship, train or truck, and (b) involves regularly traveling away from home and stopping during a single trip at localities with differing federal M&IE rates. Over-the-road drivers typically fit. A local delivery driver home every night does not, because there is no travel away from home.

The IRS publishes the special rates in an annual notice. Under Notice 2025-54, for travel on or after October 1, 2025, the special transportation industry M&IE rate is $80 per day for any locality in the continental United States and $86 outside it. The IRS issues a new notice each fall, so check the current one for later travel.

There is a consistency rule. Under section 4.04(3), if you use the special rate, you must use it for all of your travel within the continental United States during the calendar year. You cannot switch back and forth between the special rate and the locality rates to pick the higher number each trip.

Doing the math

Section 6.05(1) of Rev. Proc. 2019-48 says the entire M&IE amount computed under section 4.03 is treated as a food and beverage expense, so the 274(n) limit applies to all of it. For a driver subject to hours of service, that limit is 80 percent.

So a self-employed driver who is away from home 250 days a year at the $80 continental rate computes $20,000 in M&IE, and deducts 80 percent of it, or $16,000. Partial days need care. Section 6.04 of the revenue procedure says that for the section 4.03 method, partial days must be prorated using the Federal Travel Regulations method, which allocates three-fourths of the applicable rate to each partial day of travel. Departure and return days are partial days. Count them that way.

Lodging and incidental expenses

Self-employed drivers should know what the per diem method does not cover. Section 4.03 of Rev. Proc. 2019-48 lets a self-employed individual use a standard rate for meals and incidental expenses only. The revenue procedure says it does not provide rules for using a per diem rate to substantiate lodging. If you pay for a motel, you deduct the actual cost and you need the receipt.

On days when you pay incidental expenses but no meal expenses, section 4.05 provides a separate incidental-expenses-only amount. Notice 2025-54 sets it at $5 per day for travel on or after October 1, 2025, and section 6.05(5) of the revenue procedure says that amount is not subject to the 274(n) meal limit. You cannot use it on the same days you use the section 4.03 M&IE method.

Employee drivers are in a different position

If you are a W-2 company driver, you cannot deduct unreimbursed meals on your own return. IRC 67(h), as amended in 2025, says no miscellaneous itemized deduction is allowed for any taxable year beginning after December 31, 2017, and unreimbursed employee business expenses fall in that category. The suspension that was scheduled to end after 2025 is now permanent.

For employee drivers, per diem has to come through the employer under an accountable plan. Rev. Proc. 2019-48 explains that a payor can pay a meal and incidental expense allowance, including a cents-per-mile allowance to an over-the-road driver, and treat the amount up to the deemed substantiated amount as nontaxable if the employee substantiates time, place and business purpose. Amounts above that are wages subject to withholding. An arrangement that simply relabels wages as per diem, paid regardless of travel, does not meet the business connection requirement and is all taxable.

Whether you are a contractor or an employee for this purpose depends on the facts. See our guide to owner-operator classification.

What the auditor will ask for

Here is the part drivers miss. The per diem rate only substantiates the amount. Section 4.03 of Rev. Proc. 2019-48 says the amount is deemed substantiated only if the self-employed individual substantiates the time, place and business purpose of the travel for each day or partial day.

That traces back to IRC 274(d), which denies a deduction for traveling expenses, including meals and lodging while away from home, unless you substantiate by adequate records or sufficient evidence corroborating your own statement the amount, the time and place of the travel and the business purpose.

In a trucking audit, adequate records usually means some combination of:

• Electronic logging device records showing duty status and location by day.
• Bills of lading, dispatch records and trip sheets.
• Fuel receipts with dates and locations.
• Settlement statements from the carrier showing loads and dates.
• A calendar or log showing each day away from home and each day at home.

An examiner will compare the days you claimed to those records. A driver who claims 300 days but whose fuel receipts and logs show 210 days on the road loses the difference, and may face an accuracy-related penalty on top.

Tax home: the threshold question

All of this depends on being "away from home." The Code allows the deduction for traveling expenses while away from home in the pursuit of a trade or business, and Rev. Proc. 2019-48 is built around travel away from home. Whether a driver has a tax home to be away from is a factual question. If you live in the truck full time and there is no place you regularly return to, that question needs an answer before you claim a full year of per diem, not after an examiner asks it.

Common mistakes

1. Claiming 365 days. Nobody drives every day of the year, and examiners know it.
2. Applying 100 percent instead of 80 percent.
3. Mixing the special rate and locality rates in the same year.
4. Claiming per diem and also deducting meal receipts for the same days. Rev. Proc. 2019-48 section 6.06 says no other deduction is allowed for those expenses.
5. Employee drivers claiming meals on their own return.
6. No logs, no receipts, no calendar.

Per diem is not the only trucking deduction that draws scrutiny. Fuel tax credit claims get their own attention; see our guide to fuel tax credit claims. And keep your Form 2290 current, covered in our Form 2290 guide. If an audit notice is already on the dash, read how the firm approaches IRS audits.

The rate is the easy part. The days are the deduction. Keep the logs.