Episode 36: Meal Deduction Changes

Business Meal Deductions Are Ending in 2026: What You Need to Know

A quiet but impactful change is coming to the tax code — and it may catch many employers by surprise. Starting January 1, 2026, the IRS will eliminate part of the business meal deduction that companies have relied on for decades.

Under the Tax Cuts and Jobs Act, businesses could write off snacks, coffee, catered lunches, and other onsite meals provided to employees. These deductions helped reduce taxable income while also boosting employee morale. But in 2026, those everyday workplace perks will no longer qualify — unless your business operates in the fishing or maritime industries.

What’s Changing?

❌ No more deductions for office snacks, coffee, catered lunches, or pizza parties.

✅ Client meals, travel meals, and business development meals WILL remain deductible.

✅ Holiday parties, company picnics, and other occasional employee events will still qualify for a 100% deduction.

Why It Matters

This isn’t just about taxes — it’s about company culture. For hospitals, hotels, manufacturers, and tech companies, providing meals is part of the workplace experience. Losing the deduction could force employers to choose between cutting perks or absorbing the cost without a tax benefit. Either way, the change could impact both morale and budgets.

Who Still Qualifies?

Certain fishing vessels, offshore platforms, and maritime operations can continue deducting 50% of crew meals. But for the vast majority of businesses, this deduction disappears after 2025.

What Businesses Should Do Now

• Review your employee perks budget and decide what you’ll keep or cut in 2026.

• Update your bookkeeping categories to separate deductible vs. non-deductible meals.

• Look for other tax strategies that can offset the lost deduction.

• Communicate changes with employees to manage expectations.

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