What's Changing with Meal and Entertainment Deductions in 2026?

If you’ve been tracking business meal and entertainment expenses the same way for years, January 1, 2026, is a real turning point.

Starting in 2026, most employer-provided meals—things like office snacks, company cafeteria food, and meals for employees working late—become completely non-deductible. That’s a big shift from the 50% deduction many businesses have relied on.

At Patrick Accounting, we’ve been preparing our clients for this change well ahead of time because it impacts more than just your tax return. It affects how you budget, how you categorize expenses, and ultimately how much you owe.

Below, we’ll break down what’s changing in 2026, what’s staying the same, and what you should do now to avoid surprises later.

The Big Change: Employer-Provided Meals Drop to 0% Deductible

Starting January 1, 2026, employer-provided meals are no longer deductible.

What counts as employer-provided meals?

• Company cafeteria food
• Breakroom snacks (coffee, donuts, pantry items)
• Meals provided for the convenience of the employer
• Overtime meals

Under the Tax Cuts and Jobs Act (TCJA), these expenses were 50% deductible from 2018 through 2025. But that provision expired at the end of 2025, which means you'll get zero tax deduction for these expenses starting in 2026.

Why does this matter? If you’ve been budgeting with the expectation that employee meals or office snacks come with a tax benefit, that benefit is disappearing. You’re still paying for them, but you’re not getting a deduction anymore.

What's Staying the Same: Business Meals with Clients

A little bit of good news: Business meals with clients or business associates remain 50% deductible in 2026.

This includes meals where you're discussing business with a client, prospective customer, or business partner. The key requirements haven't changed:

• You (or an employee) must be present at the meal.
• The meal must have a clear business purpose.
• You must properly document who attended, when, where, and what business was discussed.

The meal also needs to be ordinary and necessary for your business, not lavish or extravagant. So, your typical client lunch, business dinner, or coffee meeting still qualifies.

That said, the documentation part matters more than ever. Keep detailed records because if the IRS asks, you need to be able to show the business purpose behind each meal.

Entertainment Expenses: Still Non-Deductible

Entertainment expenses have been non-deductible since 2018, and that's not changing in 2026.

That includes taking a client to a baseball game, golf outing, concert, or sporting event.

There is one exception: If food and beverages are purchased separately from entertainment and are clearly itemized, those meals may be 50% deductible, as long as they meet the business meal requirements.

For example, if you take a client to a basketball game and buy $50 in tickets and $30 in food, the tickets are non-deductible, but the food could be 50% deductible if it's itemized separately and documented properly.

The Good News: Company-Wide Events Are Still 100% Deductible

Here's one bright spot in the 2026 changes: Company-wide social events remain 100% deductible.

This includes:

• Holiday parties
• Company picnics
• All-staff celebrations
• Team-building events

The key requirement is that the event must be primarily for the benefit of your employees and available to all employees, not just owners, executives, or highly compensated employees.

So, if you're planning your company holiday party, you can still deduct 100% of the cost as long as it meets those criteria.

Also worth noting: Employee travel meals remain 50% deductible when the employee is traveling away from home for business and IRS requirements are met.

If all of these rules are starting to blur together, this quick comparison shows exactly what’s changing in 2026, and what isn’t.

Now that you’ve seen how deductions shift in 2026, let’s talk about what that means for your budget and tax planning.

What This Means for Your 2026 Budget

If you've been treating all meal expenses the same way, 2026 requires a more careful approach.

Here's what we recommend:

1. Review your current meal and entertainment spending. Look at what you spent in 2024 and 2025 on employer-provided meals versus business meals with clients. How much did you deduct? That number is about to change.
2. Adjust your 2026 tax planning expectations. If you've been counting on a deduction for office snacks and employee meals, you'll need to factor in the loss of those deductions in your tax planning. Work with your accountant to update your projections.
3. Track expenses more carefully. The line between deductible and non-deductible meals is getting more important. Make sure your bookkeeping system properly categorizes:
   → Business meals with clients (50% deductible)
   → Employer-provided meals (0% deductible)
   → Company-wide events (100% deductible)
   → Entertainment expenses (0% deductible)
   
4. Download our updated 2026 Meals & Entertainment Guide. Our updated guide reflects the new 2026 rules. It includes examples, documentation tips, and a quick-reference chart you can keep handy.
   → Download the guide now

Industry-Specific Exceptions

Some industries have special rules that allow more favorable treatment for employee meals, including:

• Restaurants
• Caterers
• Fishing/fish processing businesses

If your business falls into one of these categories, talk with your accountant about how these rules and exceptions apply to you.

For most business owners, though, the standard 2026 rules apply.

Why These Changes Matter for Your Tax Planning

The biggest shift in 2026 is clear: Employer-provided meals are no longer deductible.

If you've been claiming deductions for office snacks, company cafeteria meals, or convenience meals, those deductions are going away, and that directly affects your tax bill.

At Patrick Accounting, we help business owners plan for changes like these before they become expensive surprises. The goal is to stay proactive, not reactive.

If you want help understanding how these changes affect your specific business:

• Download our updated 2026 Meals & Entertainment Guide
• Schedule a complimentary consultation with our team

We'll help you adjust your budget, update your bookkeeping categories, and make sure you're still capturing every deduction you're entitled to.

The best time to plan for 2026 tax changes is now.