Meal and Beverage Expenses Fully Deductible for the Next Two Years

When President Trump signed into law the recently passed stimulus legislation known as the Consolidated Appropriations Act (Act), most discussion and concern focused on the Payroll Protection Loan program and whether expenses would be deductible that allowed, or will allow, many taxpayers to receive full forgiveness of their loans. An aspect of the bill that’s largely gone unnoticed, however, is a provision that gives taxpayers the ability to fully deduct the cost of meal and beverage expenses for the next two calendar years, beginning January 1, 2021.

The Act adds an exception to the 50 percent limitation of the deductibility of business-related food and beverage expenses, stating specifically that the limitation shall not apply to such expense for food or beverages provided by a restaurant if paid for or incurred after December 31, 2020 or before January 1, 2023.

What’s unclear is the definition of restaurant. It’s uncertain, for instance, whether purchase of food at a sporting event will be eligible for the full deduction. Hopefully the IRS will provide additional guidance on the matter. It would be in the best interest if this definition is as broad as possible, since this part of the Act is clearly aimed at providing an incentive to resume meal and beverage business expense activity and provide a much-needed boost to the struggling hospitality industry.   We will continue to monitor guidance as it becomes available.

Please consult your Schneider Downs tax consultant if you have additional questions or would like to discuss this topic in further detail.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2023 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Tax BY Kirk Mitchell
Can “Moore” Tax be Refunded from IRS? How to Protect Your Potential Claim for Refund of §965 Foreign Corporation Transition Tax
Fraud, Tax BY Charlotte Garraway
5 Red Flags of Fraudulent ERC Providers
IRS Issues Moratorium on Processing New Employee Retention Credit Claims
IRS Releases Guidance on the Requirement to Capitalize Research and Experimental Expenditures
Automobile, Tax BY Steven Barber
How Did the IPIC Method Fare for Auto Dealerships Inventory in Year 2?
New Pennsylvania Annual Report Filing Requirement
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.