Starting in 2026, the rules around employer-provided meals are getting a major shake-up under OBBBA — and that “50% deductible lunch” might soon cost you 100%!

Here’s what’s changing ⬇️

🚫 No more deductions for:

• Meals provided for the convenience of the employer (Sec. 119(a))

• Employer-operated cafeterias or snack areas (Sec. 132(e)(2))

Before this? Those were typically 50% deductible, sometimes even fully deductible.

✅ Still deductible (some exceptions apply):

• Meals treated as employee compensation

• Meals for crew members on certain commercial vessels and facilities

• Employee recreation events (like holiday parties or picnics 🎉)

• Food provided to the public (e.g., promotional events or customer-facing sales)

• Meals subject to DOT “hours of service” limits (still 80% deductible)

🍴 Big exception alert: Restaurants, caterers, fishing vessels, and certain fish processing facilities can continue deducting meals for employees — but only up to 50% unless another exception applies.

👉 Takeaway for business owners: If your business offers meals for both employees and customers, make sure to separate those expenses now. Proper tracking will be critical for your 2026 returns.

💡 Pro Tip: There’s no change to the ability to exclude the value of meals from employee income under Sec. 119 or Sec. 132 — as long as the usual requirements are met.

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