[Romel1980]

Can an employer legally remove a per deim if you are a contractor?
I have been working for a company about 4 month and now they said I would not be receiving a lodging per deim because come 2012 (which we are in now) the IRS will be taxing 50% of what is given to the contractor to the Employer/Business.

Is this true? Or Legal?

[cdad]

This may answer some of your questions until one of our tax professionals can come by and help you.

http://search.yahoo.com/r/_ylt=A0oG7...-pdf/p1542.pdf

[Romel1980]

This does not answer my question I know the maximum rates for my county which are $101 for lodging and $66 M&IE Rate. My question was is it legal for an employer to just give you one instead of both??
I currently only get $101 for lodging but not $66 for Meals. Originally when I started working here I received both but 4 month into my contract they gave me a raise in hourly rate but come a week after they removed my Meal per deim which to me seem kind of fishy of why they removed my Meals per deim. Their excuse was a tax audit was done y the IRS and notified them that in the year 2012 all employers issing "MEAL" per deims would be taxed 50% of the money that was issued to the contractor therefore that is why they removed my MEALS per deim. They said a memo would be issued by my employer but to date I still have not received that memo nor have a seen any publication from the IRS stating what my employer told me.

[MukatA]

You should talk to your employer. They do not want to give you per diem for meals. May be they have already added this in your raise.

[MLSNC]

As far as I know there is no rule which will require an employer/contractor to pay both the lodging per diem and the meal per diem. They could pay one or both or neither depending on what their agreement is with you. What they have found out is that they can only deduct 50% of the meal per diem. As mentioned above you should consult with your employer. If they have not increased your fee for this, maybe you can get them to increase your pay - that would be 100% deductible for them and income to you. You then can claim 50% of your meal expense.

[AtlantaTaxExpert]

To my knowledge, payment of per diem (for lodging and/or meals) is not legally required, at least not on the federal level.

While most companies DO pay such per diems to reimburse their employees' expenses whil on temporary work assignments outside of their normal work areas, it is NOT required. Some states MAY require it, but that would depend on the state.

[cdad]

To my knowledge, payment of per diem (for lodging and/or meals) is not legally required, at least not on the federal level.

While most companies DO pay such per diems to reimburse their employees' expenses whil on temporary work assignments outside of their normal work areas, it is NOT required. Some states MAY require it, but that would depend on the state.

I think part of the original question and you would know better then I. Is the claim being made by his company that the tax rate (for them) is now different for this tax year then it was before. So based on that claim is why it was dropped from the benefit package.

Is that true? Has there been a rule change?

[AtlantaTaxExpert]

There has always been a 50% deduction limit on meal expenses, and hence the meal per diem. That is nothing new.

I am NOT aware of any change to the deductibility of the lodging per diem.

[Fr_Chuck]

But legally, yes first you are not an employee, a 1099 worker is a independent contractor. Unless you have a written contract ( which you should) they may change the terms with a notice to you of the change. You have the choice to either accept this term or stop doing the work for them.