Temporary 100% deduction for business meal expenses

April 8, 2021

New guidance from Treasury and the IRS includes a temporary 100% deduction for business meal expenses.

From Jan. 1, 2021, through Dec. 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present for the meals and the expense is not lavish or extravagant. See Notice 2021-25.

Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption. The provision does not include businesses that primarily sell pre-packed goods for immediate consumption, such as grocery and convenience stores. 

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