I work construction and the per diem rates in the last year or so have jumped way up. Which is good for me but then how do I deal with the large amount that I earn that way. Like I receive per diem at a rate of $100 for everyday of the week. Am I required to claim that and pay taxes on it and is there a time limit on it. Like I have been told that if I stay on a job for more than a year straight that the per diem is taxed at a 40% rate no matter what after the year mark. Is that true, cause I can't find anything that will tell me any of this anywhere. Please fill me in someone, thanks.

Per diem is taxed at your current tax rate, be it 10%, 15%, 25%, 28% or whatever. The 40% rate quoted is a bit high.

Yes, it IS taxable, but if you meet the criteria for the job being temporary in nature, you can offset the tax by claiming temporary job expenses as an itemized deduction using Form 2106 and Schedule A.