What are the business entertainment expenses & meals deductions under IRC §274?
IRC §274 limits food and beverage expense deductions and generally disallows entertainment expense deductions. Deductible food and beverage expenses are subject to a 50% limitation, while entertainment expenses are nondeductible, unless an exception applies.
What are the rules for employer-provided meals?
Under §274(o), added by the OBBBA, no deduction is allowed for expenses paid or incurred after 2025 with respect to:
- Meals furnished to employees that are excludable under §119(a) (meals furnished for the convenience of the employer); and
- Food and beverage expenses for an employer-operated facility (defined in §132(e)(2)).
However, §274(o) does not apply to expenses described in §274(e)(8) (entertainment sold to customers) or §274(n)(2)(C) (meals provided on certain commercial vessels,…
