The Tax Cuts and Jobs Act (TCJA) imposed new limitations on business deductions for meals and entertainment expenses that were incurred or paid after December 31, 2017, the effective date of the applicable Tax Cuts and Jobs Act (TCJA) provisions. The Consolidated Appropriations Act of 2021 (CAA) allows a 100% deduction for certain business meal expenses paid or incurred during calendar year 2021 or 2022.

 

This table summarizes these changes and how business meal and entertainment expenses are deductible under each.

 

Business Expense TCJA Rules (2018 – 2020, 2023+) TCJA + CAA Rules (2021-2022)
Entertainment 0% 0%
Meals during Entertainment

(Meal costs must be separately stated on the invoice)

 

 

50%

 

 

100%

Meals provided by a restaurant 50% 100%
Travel meals provided by a restaurant  

50%

 

100%

Employer provided snacks in a breakroom  

50%

 

50%

Snacks and drinks provided free of charge for the public  

100%

 

100%

Events for employees (company-wide party)  

100%

 

100%

 

We recommend reviewing your meals and entertainment accounts to determine if additional accounts are necessary to properly reflect your company’s activities. It is also a good time to ensure the required supporting documentation is being gathered.

If you have questions or need help updating your meals and entertainment expenses, please let us know.

WHY WHITTAKER?

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