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  • Writer's pictureKathryn Bruns, CPA

Please try to have all business related meals provided by restaurants and related business types

A typical business related "meals" situation that is entitled to a tax deduction, is when the owner brings in food for a staff meeting. Traditionally, such food is only 50% deductible. A sneaky little change has been made for the 2021 and 2022 tax years, and it may make you re-think where you bring the food in from.

Under the new 2021-2022 100% deduction, if you bring in the food from a "restaurant" (defined as a retail establishment that prepares food for sale meant for immediate consumption), this qualifies. It qualifies even if you do "take-out" rather than eat at the establishment. This is differentiated from, say, taking out a tray of food from your local supermarket (only 50% deduction).

So...for 2021-2022, if it makes no difference to you for non-tax reasons, choose to take out from the restaurant-type establishment. The whole reason for this new rule was to support more business for the restaurants, which took a hit during the COVID crisis. Since I don't think this new rule was highly publicized, I hope this blog helps, even if a little bit.

Since the tax world is never simple, note that NC DOES NOT CONFORM to this new rule, and therefore these types of restaurant food take-out situations will only be 50% deductible on your NC tax return. If you're in other states, check your state rules on this.

By the way, in case it would get lost in the shuffle of this blog, note that eating at the restaurant, also qualifies for the 100% federal tax deduction. It isn't just the take-out situation. Support your local restaurants, they need it !

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