Congress Lifts 50 percent Limit on Deduction For Business Meals, Jan. 7, 2021

The 2017 tax reform legislation expanded the deduction to include meals provided through an eating facility to employees if certain conditions are met. However, the deduction is generally capped at 50 percent of the value of the meal—provided the meal is neither lavish nor extravagant. Congress lifted the 50 percent cap for 2021 and 2022, however, so that business meals are now fully deductible under the year-end Consolidated Appropriations Act (CAA). This change is designed to support the restaurant industry during the Covid-19 recovery, and, as such, the deduction is limited to food and beverages provided by a restaurant. For more information on the deduction for business meals, see Q 8749.