Overview
As part of the Consolidated Appropriations Act signed into law on December 27, 2020, the deductibility of meals is changing. Food and beverages will be 100% deductible if purchased from a restaurant in 2021 and 2022.
Here are some examples:
Fully deductible meals and entertainment
Here are some common examples of 100% deductible meals and entertainment expenses:
A company-wide holiday party
Food and drinks provided free of charge for the public
Food included as taxable compensation to employees and included on the W-2
50% deductible expenses
Here are some of the most common 50% deductible expenses (for 2021 and 2022, they are 100% deductible if purchased from a restaurant):
A meal with a client where work is discussed (that isn’t lavish)
Employee meals at a conference, above and beyond the ticket price
Employee meals while traveling (here’s how the IRS defines “travel”)
Treating a few employees to a meal (but if it’s at least half of all employees, it’s 100 percent deductible)
Food for a board meeting
Dinner provided for employees working late