In order for meals to be 100% deductible, they must meet the qualifications below.
For 2021 and 2022 only, businesses can generally deduct the full cost of business-related food and beverages purchased from a restaurant. Otherwise, the limit is usually 50% of the cost of the meal.
To qualify for the enhanced deduction:
- The business owner or an employee of the business must be present when food or beverages are provided.
- Meals must be from restaurants, which includes businesses that prepare and sell food or beverages to retail customers for immediate on-premises or off-premises consumption.
- Payment or billing for the food and beverages occurs after December 31, 2020, and before January 1, 2023.
50% Limit
In general, you can deduct only 50% of your business-related meal expenses, unless an exception applies. (If youare subject to the Department of Transportation's “hours of service” limits, you can deduct 80% of your business-related meal expenses.
See Individuals subject to “hours of service” limits, later.)
The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed.
Examples of meals might include:
• Meals while traveling away from home (whether eating alone or with others) on
business, or
• Meal at a business convention or business league meeting.
The expense cannot be lavish or extravagant.
Grocery stores, convenience stores and other businesses that mostly sell pre-packaged goods not for immediate consumption, do not qualify as restaurants.
Employers may not treat certain employer-operated eating facilities as restaurants, even if they operate under contract by a third party.
https://www.irs.gov/pub/irs-pdf/p463.pdf
