Employer-Provided Food and Beverage Deduction
In general, employer-provided food and beverages are subject to the 50% limit in regard to tax deductions until tax year 2025.
Currently, the operation by an employer of any eating facility for employees shall be subject to the 50% rule if:
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Such facility is located on or near the business premises of the employer, and
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Revenue derived from such facility normally equals or exceeds the direct operating costs of such facility.
Effective for years after 2025, none of these expenses will be deductible.
For 2021 and 2022, with respect to the 100% deduction available for restaurant-provided meals, an employer may not treat as a restaurant any employer-operated eating facility even if such eating facility is operated by a third party under contract with the employer.
Food or beverage expenses of crews of certain drilling rigs and crews of certain commercial vessels (Code Sec. 274(n)(2)(C) as amended by the TCJA), but not fishing vessels, are fully deductible.