I should not be this excited, but I am! On December 27, 2020, in an effort to help the restaurant industry due to the COVID-19 pandemic, lawmakers enacted a new, 100 percent business meal deduction for calendar years 2021 and 2022.
To qualify for the 100 percent deduction, you need a restaurant to provide you with the food or beverages. The law requires only that the restaurant provide the food and beverages. You don’t have to pay the money directly to the restaurant. For example, you qualify for the 100 percent deduction if you order a restaurant meal that’s delivered by Uber Eats or Grubhub. ( This is so awesome!!)
You must be present at the business meal, and you must provide the business meal to a person with whom you could reasonably expect to engage or deal with in the active conduct of your business, such as a customer, client, supplier, employee, agent, partner, or professional advisor, whether established or prospective.
Remember, to qualify for the 100 percent deduction, you need a restaurant. The IRS recently provided definitions and examples of what is and is not a restaurant.
A restaurant is “a business that prepares and sells food or beverages to retail customers for immediate consumption, regardless of whether the food or beverages are consumed on the business’s premises.” It is not any of the following:
The 50 percent limitation applies to business meals from the sources listed above.
The fact that the food and beverage is from a restaurant creates the 100 percent deduction. This is a slam dunk people! Now lets get out there and eat with our clients, prospects, suppliers, etc.
(In my Oprah voice): You get a lunch meeting! And you get a lunch meeting! And you get a lunch meeting!!