Food and beverages will be 100% deductible if purchased from a restaurant in 2021 and 2022. This applies to filing your taxes in 2023. But for purchases made in 2023 onwards, the rules revert back to how they were defined in the Tax Cuts and Jobs Act. This means purchases at restaurants are no longer 100% deductible.

For the 2026 tax year, the IRS has reinstated stricter limits on business meal deductions following the expiration of temporary pandemic-era incentives. Generally, business meals are 50% deductible, provided they are "ordinary and necessary" and not "lavish or extravagant." A major 2026 change under recent legislation disallows deductions for employer-provided meals (like in-office snacks or subsidized cafeterias) that are excluded from an employee's income—these are now 100% non-deductible for the business. However, you can still claim 100% for company-wide social events like holiday parties or team-building outings. To qualify for the 50% deduction, an owner or employee must be present at the meal, and you must maintain meticulous records, including the date, amount, location, and the specific business purpose or relationship of the person being treated. Without this "substantiation," the IRS can deny the deduction entirely during an audit.