Are Employees Meals paid by the owner a business expense?

Forum|Forum|3 years ago
April 5, 2023
5 replies
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I have a new sole-proprietor business client that owns a construction company and pays every workday for all of his full-time employee's lunch. This is more that $4000 for the whole year. Nothing fancy just regular to-go meals from a restaurant that he pays of his company to reward his loyal employees.

I am under the impression that meals are deductible if the main purpose of the meals was the conduct of business but what about employees' meals while on lunch break?

ProSeries Professional

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Best answer by taxes96786

yes it is considered on-site meals and is take as an expense not related to other business meals.
Don't put it on the meals line because the full amount is deductible.

sjrcpa

Level 15

Do they have to eat those meals and are not allowed to leave the worksite to get their own lunches?

Is the worksite so remote that there is no place to get lunch?

The more I know the more I don’t know.

G

GildardoAuthor

Level 4

They can leave and get their own or bring their own too.

The worksites are usually far remote from any restaurants but not always.

Thank you!

T

taxes96786Answer

Level 8

yes it is considered on-site meals and is take as an expense not related to other business meals.
Don't put it on the meals line because the full amount is deductible.

BobKamman

Level 15

I'm not sure about the employer being able to deduct 100%, not just 50%, of the meal costs. See discussion of Section 274 starting on Page 6 of these IRS training materials (which may not be up to date):

https://www.irs.gov/pub/irs-drop/eemeals.pdf

T

taxes96786

Level 8

Bob:

100% deductible:

Meals provided on the employer’s premises to more than half of the employees for the convenience of the employer, meaning meals provided to employees to keep them working late or on weekends for the employer’s convenience.
50% deductible:
Meals directly related to business meetings of employees, stockholders, agents, and directors
Office meetings and partner meetings
Meals with clients, customers, and vendors that will benefit the business
Meals while on business travel status
Meals while attending a business seminar, convention, or any other form of meeting