Tax
California Franchise Tax Board
2021-2022 Restaurant meals deductibility
2021 and 2022 Meals and entertainment deductibility:
Type of Expense |
2017 (old rules) |
2018 (new rules) |
2019 and yrs after |
Entertaining clients (concert tickets, golf games, etc.) |
50% deductible |
0% deductible |
0% deductible |
Business meals with clients |
50% deductible |
50% deductible |
50% deductible |
Office snacks and meals |
100% deductible |
50% deductible |
50% deductible |
Company-wide party |
100% deductible |
100% deductible |
100% deductible |
Meals & entertainment (included in compensation) |
100% deductible |
100% deductible |
100% deductible |
Fully deductible meals and entertainment
Here are some common examples of 100% deductible meals and entertainment expenses:
- A company-wide holiday party
- Food and drinks provided free of charge for the public
- Food included as taxable compensation to employees and included on the W-2
50% deductible expenses
Here are some of the most common 50% deductible expenses (for 2021 and 2022, they are 100% deductible if purchased from a restaurant):
- A meal with a client where work is discussed (that isn’t lavish)
- Employee meals at a conference, above and beyond the ticket price
- Employee meals while traveling (here’s how the IRS defines “travel”)
- Treating a few employees to a meal (but if it’s at least half of all employees, it’s 100 percent deductible)
- Food for a board meeting
- Dinner provided for employees working late
So what’s nondeductible?
Most work-related meal purchases you can think of are either 100 or 50 percent deductible. But there are a few exceptions. For example, if you pay for your clients’ night out but you don’t actually go with them, it’s nondeductible. The same applies to a client meal at a restaurant where you invite friends or spouses—the cost of your friends is nondeductible (but you can write off half the client bill).
And of course, with the Tax Cuts and Jobs Act, client entertainment is also nondeductible—no more golf games or courtside tickets.
California does NOT conform to Federal and restaurant meals deduction are limited to 50%.