Tax legislation within OBBBA, passed in 2025, changed the qualifications for meal deductions for 2026. Business owners who regularly take meal deductions, you’ll want to take note.
In this article:
- Company-wide meals (holiday parties, birthday celebrations, etc.) remain 100% tax-deductible.
- Staff meals and snacks for employee convenience are no longer deductible—period.
- Business meals (with clients, prospects, recruiting, employee meetings, or business travel) continue to be 50% deductible.
Meals Deduction for 2026
Company-Wide Meals
This will remain the same: 100% deductible. What qualifies as a company-wide meal? Examples include breakfasts or lunches provided to the entire team from the company, like birthday celebrations or holiday parties.
Staff Meals & Snacks at the Convenience of the Employer
A snack break used to mean a tax break.
This is the biggest change in meal deductions for 2026: what was once considered 50% deductible—providing office snacks or meals at the convenience of the employer—will now be completely non-deductible. But we can guess your employees will still appreciate a well-stocked breakroom, even if you can’t get a tax break on it.
What’s the difference between company-wide meals vs. staff meals and snacks? Think of company-wide meals as something you offer to your employees primarily for social—rather than work—purposes. On the other hand, ordering in deep-dish pizza for a department meeting or treating your overtime employees to dinner at the office is primarily work-focused and considered to be at the “convenience” of the employer; thus, these types of meals can no longer be deducted.
The exception to this change is the restaurant and fishing industries, which can still deduct 100% of employee-provided meals made at the convenience of the employer.
Business Meals
Business meals will continue to be a 50% deductible expense. What qualifies as a business meal?
- Meals with current clients, colleagues, prospective clients, business partners, or other business-related contact where the primary purpose is to get new business, encourage the continuation of current business, or discuss primarily business-related matters
- Meals purchased while traveling for business-related matters, attending a reception, meeting, etc. Meals purchased and eaten alone while traveling for business-related purposes still qualify for the 50% deduction.
- Professional development meals, including those purchased while attending or traveling to continuing professional education (CPE) courses, professional conferences or conventions, or in-house training sessions such as lunch‑and‑learns.
Always Keep Detailed Receipts
You can never go wrong with keeping detailed receipts, especially when it comes to the possibility of an IRS audit. Always ensure your employees are keeping meal receipts and noting who was present at the meal and high-level topic of what was discussed, just in case. You’ll be happy to have detailed records on hand should an IRS audit ever occur.
Set up your Books for Success
With multiple rule changes taking effect, staying organized is key. Create separate expense accounts in your books that mirror each meal-deduction category—company-wide meals, staff meals/snacks, and business meals. Tracking these throughout the year makes it easier for your accountant to apply the correct deduction and helps ensure you aren’t missing out on any 100% or 50% deductible opportunities.
Make Better Business Decisions with Landmark CPAs
With a suite of services from business consulting to tax planning to accounting, we are here to help you make the best business decisions for you. Contact us to get started.