Sally Schreiber has published her article, “IRS explains which meals qualify for temporary 100% expense deduction,” in the AICPA Journal of Accountancy. The article, which unpacks Thursday’s IRS guidance for restaurant businesses in regards to qualifying for deductions, begins as follows:
The IRS released guidance on Thursday explaining when the temporary 100% deduction for restaurant meals is available and when the 50% limitation on the deduction for food and beverages continues to apply for Sec. 274 purposes (Notice 2021-25).
Under Sec. 274(n)(1), a deduction for any expense for food or beverages is generally limited to 50% of the amount that would otherwise be deductible. However, the Consolidated Appropriations Act, 2021, P.L. 116-260, enacted a temporary exception to the limitation for amounts paid or incurred after Dec. 31, 2020, and before Jan. 1, 2023, for food or beverages provided by a restaurant (Sec. 274(n)(2)(D)). This temporary 100% deduction was designed to help restaurants, many of which have been hard-hit by the COVID-19 pandemic.
To provide certainty to taxpayers, the IRS guidance explains when the temporary 100% deduction applies and when the 50% limitation continues to apply.
To view the full article, click here: “IRS explains which meals qualify for temporary 100% expense deduction”