As the employer, I paid my employee per diem allowance for her expenses during travelling (during the time she was away from her home while on the project) as per the IRS directions.
https://www.irs.gov/pub/irs-regs/perdiemfaq&a.prn.pdf
The daily amount that I paid was within the federal per diem rate limits and I have received expense reports as instructed on the IRS page. These payments have not been included in my employee's wages and as a result on her W2.
My question is, how do I deduct these per diem payments on my business return?
