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My understanding is that these per diem allowances are not taxable and therefore should not be added to the amount on which payroll deductions are figured.

Is this correct?

As happens so often when discussing tax, the answer is "it depends".

If your employer maintains an accountable plan then it isn't necessary for them to include the allowance or reimbursement in your wages. If they don't then they must.

The relevant information is in Pub 463 around Page 25. You might want to print it out and give it to your employer.


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