The formulas
- Business meals: 50% x amount
- Entertainment: 0%
- Employer-convenience meals: 50% before 2026, 0% for amounts paid after 2025
- Items in a section 274(n)(2) exception: 100%
How it works
Section 274(n) caps the deduction for food and beverages at 50 percent. Section 274(a) disallows entertainment, amusement and recreation. Section 274(k) also needs the meal not to be lavish and requires the taxpayer or an employee to be present. The restaurant meal exception expired for amounts paid before 2023.
Section 274(o) disallows the deduction for the cost of operating certain employer eating facilities and meals furnished for the convenience of the employer, for amounts paid or incurred after December 31, 2025. The list of 100 percent exceptions in section 274(n)(2) includes items such as certain employee recreation and reimbursed expenses. Classify those yourself and enter them in the last line. This tool does not test the substantiation rules.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
Is entertainment deductible?
No. Section 274(a) disallows activities of a type considered entertainment, amusement or recreation, and facilities used for them.
Did the 100 percent restaurant deduction continue?
No. The exception in section 274(n)(2)(D) covered expenses before January 1, 2023.
What other conditions apply?
Under section 274(k) the meal must not be lavish or extravagant, and you or an employee must be present.
Sources
Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.