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Prorate is a term used in IRS Publication 463 under the topic of the standard meal allowance.  The first day of a trip and the last day of a trip are subject to the prorating rules described in IRS Publication 463. The reason prorating is important to the standard meal allowance is because the first day and last day of a trip are considered partial days.  A full day goes from midnight to midnight while the first partial day goes from some time after midnight to midnight, and the last partial day goes from midnight to some time before midnight.  Because the first and last day are shortened, a taxpayer may be subject to a reduced (or prorated) standard meal allowance on those days.  The following is an example:

Assume Amy, a flight attendant for Continental Airlines, is on a 4-day trip.  Amy is based in EWR so EWR is Amy's tax home.  On this particular 4-day trip, Amy has overnights (layovers) in LAX, TPA, and DFW respectively.   The following illustration shows how a per diem calculator should select the overnight and prorate them for the standard meal allowance:

per diem meal allowance prorating example

Notice that the last day of the trip where Amy returned to EWR uses the previous day for the layover city.  That is normal and can be found within IRS Publication 463.

How much gets prorated is subject for debate.  As of this writing, IRS Publication 463 says the following:

per diem meal allowance prorating excerpt

It is up to the tax preparer or taxpayer to interpret whether an airline pilot or flight attendant should use 75% or 100% on the first and last day of a trip.  The EZPERDIEM.COM Settings Page allows pilots and flight attendants to change this to 75% or 100% depending on their interpretation of the prorating rules.  The EZPERDIEM.COM Per Diem CalculatorTM is defaulted to prorate at 75%, but changing the proration rate to 100% is simple and can be done at any time (even after all of the layovers are entered for the year).

IRS Publication 463
Traveling away from home (Prorating)

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