Reminder: Business Meal Expenses Fully Tax Deductible Through 2022

The Internal Revenue Service is reminding businesses that food and beverage expenses paid to restaurants are fully deductible for this tax year and next.

The Taxpayer Certainty and Disaster Relief Act of 2020 added a temporary exception to the 50% limit on the amount businesses may deduct for food or beverages as part of the federal government’s overall pandemic relief efforts.

Based on guidance issued by the IRS earlier this year, businesses can claim 100% of food or beverage expenses paid to restaurants from Jan. 1, 2021 through Dec. 30, 2022 “as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances.”

Restaurants are defined as businesses that prepare and sell food to be eaten on or off the premises immediately. 

Businesses who sell pre-packaged food, such as grocery and convenience stores, as well as employer-operated eating facilities do not meet the restaurant definition under the rule. 

Additional information about federal pandemic-related tax relief measures can be found on the IRS website.