I have been here for past 8 months got a project as a contractor.
I work in CA, my employer is in atlanta.
I maintain two residents. I work for hourly rate of $55 per hour.
Am I eligible to claim per diem. If yes how to do it. How much per diem I am eligible for per day?

I also used to receive per diem pay for work in the continental United States. The maximum per diem rates beginning March 17, 2008, have changed for certain locations. ( One of those being, California)

Here are two link to assist you in clarifying any questions you may have.

Publication 1542 (3/2008), Per Diem Rates (http://www.irs.gov/publications/p1542/ar01.html)
Per diem - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Per_diem)

I don't think you "claim" per diem, but rather your employer pays you a per diem, which is identified as such as a non-taxable benefit on your W-2. What you might want to do is ask your employer to pay you a per diem, and you reduce your hourly rate accordingly.

I believe that Kevin is asking whether he can claim daily living expenses in California under the proposition that the California job is a temporary job.

Based on the information provided, the answer is yes, at least for the first year. After one year, however, the IRS considers the job to be permanent and NO living expenses can be claimed.

I have been here for past 8 months got a project as a contractor.
i work in CA, my employer is in atlanta.
I maintain two residents. i work for hourly rate of $55 per hour.
am i eligible to claim per diem. if yes how to do it. how much per diem i am eligible for per day?.
Hi All,
Thanks for your reply.
My employer says I am not eligible to claim per diem.
Also as ebaines told I asked my employer to pay me per diem as non-taxable benefit
On my W-2. Even for that he disagreed to do it.
I am helpless now. Anyway once again thanks for all who responded me.

I will keep in touch.

If you are a contractor, then you will not get W2. Instead you will get 1099-misc. You will report your income on schedule C and can deduct all business related expenses.
For more information, read: Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor. (http://taxipay.blogspot.com/2008/03/w2-or-1099-employee-or-independent.html)

Kevin:

When you file your return, use an experienced tax professional and thoroughly explain your situation.

He will determine the appropriate per diem deduction and claim those expenses on the Schedule C.