New 2026 Rules: What You Can (and Can’t) Write Off for Meals and Entertainment
Beginning in 2026, important changes take effect regarding the deductibility of business meals and employee-related food expenses. While some meals remain fully deductible, others are now limited to 50% deductibility—or are no longer deductible at all. These changes may affect how your business categorizes and tracks meal expenses.
Proper classification is essential to ensure compliance and to maximize allowable deductions. Below is a summary of how common meal expenses will be treated under the current rules.
100% Deductible: Employee Social Events and Company-Wide Functions
Examples include:
- Holiday parties
- Company picnics
- Company retreats and appreciation events
- Employee appreciation events
- Birthday or work anniversary celebrations
50% Deductible: Business-Related Meals
Examples include:
- Meals incurred while employees are traveling for business
- Meals with clients/customers where business is discussed
- Meals directly related to business meetings
Note: Meals associated with entertainment activities such as sporting events or golf outings are generally not deductible unless the meal cost is separately stated and meets IRS requirements.
Not Deductible: Office Meals and Employer Convenience Meals
Examples include:
- Meals provided in the office for the convenience of the employer.
- Meals provided during internal trainings or staff seminars without clients present
- Office coffee, beverages, and snacks
- Food and beverage supplies for general office consumption
What This Means for Your Business
- Clearly identify the purpose of each meal expense
- Maintain documentation showing the business reason and attendees
- Separate employee social events from routine office meals
- Track client-related meals separately from entertainment expenses
We’re Here to Help
If you would like assistance in reviewing your expense classifications or updating your accounting procedures to comply with these new rules, please contact our office. We would be happy to help ensure your records are properly structured and tax-efficient.
