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Tax & Assurance Guidance

Meals and Entertainment Rules for 2022 Versus 2023

Posted on January 26, 2023 by

Clayton & Mckervey

Clayton & McKervey

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Understanding meals and entertainment expense deductions can be confusing. The Consolidated Appropriations Act, signed into law on December 27, 2020, temporarily changed the deductibility of meals to boost the restaurant industry. Qualified business meals purchased from a restaurant in 2021 and 2022 are 100% deductible. However, for purchases made in 2023 and beyond, the rules established in the Tax Cuts and Jobs Act apply, which means restaurant expenses are once again subject to the 50% limit on deductibility. See the chart below for a summary of the meals and entertainment rules for 2022 versus 2023.

Meals and Entertainment – Comparison Chart
2022 Treatment 2023 Treatment
Client Business Meals 100% deductible, if provided by a restaurant, otherwise

50% deductible

-Taxpayer present

-Not lavish or extravagant

50% deductible

-Taxpayer present

-Not lavish or extravagant

Office Holiday Party or Picnic 100% deductible 100% deductible
Sporting Event tickets No deduction No deduction
Meals during entertainment events 50% deductible

-If purchased separately or stated separately

50% deductible

-If purchased separately or stated separately

Transportation to/from Restaurant for business meals 100% deductible 100% deductible
Club dues No deduction No deduction
Water, coffee, and snacks at the office 50% deductible, non-deductible after 2025 50% deductible, non-deductible after 2025
Meals in Office during meetings of employees, stockholders, agents or directors 50% deductible 50% deductible
Meals during business travel 50% deductible 50% deductible
Meals at a seminar, conference or business league event 50% deductible 50% deductible
Meals included in charitable sports package 100% deductible 50% deductible
Meals provided for the convenience of employer; provided occasionally to employees; or overtime meals 50% deductible, non-deductible after 2025 50% deductible, non-deductible after 2025
Meals included as taxable compensation 100% deductible 100% deductible
Meals expenses sold to a client or customer (i.e., reimbursed) 100% deductible 100% deductible
Food offered to the public for free (e.g., at a conference or seminar) 100% deductible 100% deductible

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