Deductibility of Meals – 2026 and Beyond – Winter Accounting & Advising LLC (Pittsburgh CPA)

Starting January 1, 2026, new tax rules eliminate many deductions that employers previously took for meals provided to employees for the “convenience of the employer” (such as on-site lunches, breakroom snacks, office coffee, etc.).

Expenses that are not deductible in 2026 include:

Meals provided to employees on the business premises for convenience of the employer (breakroom snacks, free lunches, coffee stations)
Costs of operating employer eating facilities (cafeterias, dining rooms)
Most de minimis food or beverage benefits to employees if tied to on-site facilities

This is a change from prior years, when such meals were generally 50% deductible.

Business Meals with Clients, Customers & Associates

For meals that are ordinary and necessary business meals (e.g., taking a client or prospective customer to lunch), the long-standing rule remains in effect:

Partially Deductible (50%)
- Business meals are generally 50% deductible if they meet IRS criteria:

- Ordinary and necessary (business purpose)
- Not lavish or extravagant
- The taxpayer (or an employee of the taxpayer) is present
- If combined with entertainment, meal costs must be separately stated

This 50% rule applies whether the meal occurs during travel, at a business meeting, or with clients/customers — but not for general entertainment expense

Meals That Can Be 100% Deductible
- Certain meal expenses remain fully deductible (100%) because they fall under recognized exceptions:
- Meals treated as employee compensation — if the cost is included in wages and taxable to the employee.
- Employee social/recreational events — e.g., holiday parties, company picnics.
- Meals made available to the public — such as promotional food giveaways.
- Meals sold to customers in the ordinary course of business — for example, restaurants or food service businesses.
- Special industry exceptions — such as certain meals on fishing vessels or in prescribed operations.