Treasury, IRS provide guidance on tax relief for deductions for food or beverages from restaurants
Businesses can temporarily deduct 100% beginning Jan. 1, 2021
WASHINGTON – The Treasury Department and the Internal Revenue Service today issued Notice 2021-25 providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020. The Act added a temporary exception to the 50% limit on the amount that businesses may deduct for food or beverages. The temporary exception allows a 100% deduction for food or beverages from restaurants.
Beginning Jan. 1, 2021, through Dec. 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances.
Where can businesses get food and beverages and claim 100%?
Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption. However, restaurants do not include businesses that primarily sell pre-packaged goods not for immediate consumption, such as grocery stores and convenience stores.
Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if these facilities are operated by a third party under contract with the employer.
More information for business seeking coronavirus related tax relief can be found at IRS.gov.
Information provided by the IRS to business loan executives
Shared by Pamela Hewett, President/CEO Professional Funding Company. Pamela has over 20 years of experience in the business finance industry. After many years in the corporate banking world, she decided to establish her own Equipment Finance company, but unlike other Equipment financing companies, she decided that the business owners needed a partner that understood their business and assisted in their growth through a finance strategy that takes in today and the future. So Professional Funding Company, PFC was started in 2005. We are a proud woman-owned business and love to serve the small to the mid-size business community. Her hobbies are dogs, dogs, and more dogs.