Significant changes to the deductibility of employer-provided meals took effect in 2026. These new rules, originating from the Tax Cuts and Jobs Act and later modified by the One Big Beautiful Bill Act, limit or eliminate deductions many businesses have historically claimed for meals provided to employees.
What’s Changing?
Beginning in 2026, most businesses can no longer deduct the cost of meals they provide to employees. Under prior rules, employers could generally deduct 50% of the cost of meals furnished to employees during meetings, trainings, or overtime work. Additionally, expenses related to employer-operated eating facilities, such as company cafeterias, were often eligible for a deduction.
Starting in 2026, these deductions are disallowed.
In practical terms, this means:
Meals provided at the workplace for the employer’s convenience are no longer deductible
Costs associated with company cafeterias or employer-operated eating facilities are also non-deductible
Snacks and Coffee
Snacks, coffee, and similar small refreshments provided to employees continue to be treated as de minimis fringe benefits and remain unaffected by the 2026 changes. These items should continue to be handled under existing rules.
What Remains Unchanged?
These rules do not affect the deductibility of:
Business meals (such as meals with clients or prospects)
Travel-related meals
Entertainment expenses (which remain non-deductible under earlier legislation)
The legislation includes specific exceptions for certain industries, including restaurants and fishing vessels.
What Should Businesses Be Doing Now?
Now is the right time for businesses to prepare. We recommend:
1. Review Meal-Related Accounting Practices
Assess how your business currently categorizes meal expenses, including on-site meals, catered meetings, and cafeteria operations.
2. Communicate Internally
Ensure leadership, HR, and accounting teams understand the upcoming changes so they can adjust budgets and policies accordingly.
3. Discuss the Changes with Your Advisors
Your tax advisors can help determine which expenses will be impacted and identify potential planning opportunities.
Stay Informed
If you have questions or would like help evaluating how these changes may impact your organization, please reach out. We’re here to support your planning and compliance efforts.
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