Changes to the Business Meals Deduction

As we move into 2026, a major shift in the tax landscape has officially taken effect — and it impacts any business that provides meals to employees.

For years, meals provided “for the convenience of the employer” were partially deductible. That is no longer the case.

The Big Change

Starting in 2026, meals provided on your business premises for employee convenience are now 100% nondeductible.
This applies under the finalized phase-out of the TCJA and the newer provisions of the One Big Beautiful Bill Act.

What’s No Longer Deductible

If meals are provided on-site and treated as a nontaxable fringe benefit to employees, the business deduction is now zero. This includes:

• On-site or employer-operated cafeterias
• Meals for employees who must stay on-site, are on call, or have short meal periods
• Overtime meals
• Meals ordered from restaurants and brought to the workplace (delivery does not change the rule)

If it’s on-premises and for employer convenience — the deduction is gone.

Limited Exceptions Still Available

A 100% deduction still applies in only a few narrow cases:

• Meals sold to customers (restaurants, catering, food service businesses)
• Certain specialized crews (commercial fishing, select oil/gas operations)
• Taxable meals: If the value is included in employee W-2 wages, the business may deduct it as compensation
• Social events (holiday parties, company picnics, etc. primarily for non-highly compensated employees)