Generally, otherwise allowable business meal expenses are only 50% deductible. But legislation passed in 2020 temporarily lifted the 50% limitation. Now, businesses can deduct 100% of the cost of food or beverages “provided by a restaurant” in 2021 and 2022. 

In Notice 2021-25, the IRS provided some guidance on when the 100% deduction is available.

According to the IRS:

• “Restaurant” is defined as a business “that prepares and sells food or beverages to retail customers for immediate consumption,” whether or not they’re consumed on the premises.
  
  
• “Restaurant” doesn’t include businesses that primarily sell pre-packaged food or beverages not for immediate consumption — such as grocery stores, specialty food stores, liquor stores, drug stores, convenience stores, newsstands, vending machines or kiosks.
  
  
• For purposes of the 100% deduction, employers may not treat the following as a restaurant: 1) any eating facility located on the employer’s premises that provides meals that are excluded from employees’ income as “furnished for the convenience of the employer,” and 2) any employer-operated eating facility treated as a de minimis tax-free fringe benefit, even if it’s operated by a third party under contract with the employer.