Businesses Can Temporarily Deduct 100% Through December 31, 2022

The U.S Treasury Department and the Internal Revenue Service have issued Notice 2021-25 providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020. The Act added a temporary exemption to the 50% limit on the amount that businesses may deduct for food and beverages. The temporary exemption allows a 100% deduction for food & beverages from restaurants. 

Beginning January 1st 2021 through December 31 2022, businesses can now claim 100% of their food and beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present, and as long as the expense is not lavish or extravagant for the circumstances. 

Where can businesses get food and beverages and claim 100%

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. However, restaurants do not include businesses that primarily sell pre-packaged goods not for immediate consumption, such as grocery stores & convenience stores.

Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if these facilities are operated by a third party under contract with the employer.

Make sure to save those receipts!


Information above obtained from irs.gov

Find more information for businesses seeking coronavirus related tax relief here.

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