If corporation has quarterly sales meetings for employees and vendors and sets up lunch/dinners during the meetings, would 100% of the lunch/dinners be deductible or would the lunch/dinners fall under meals and entertainment and only 50% deductible?
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100% Deductible
TTB Page 8-2
TTB Page 13-27• Employer’s deduction for meals provided to employees as a
de minimis fringe benefit (see Tab 13).......................................... 100%
De Minimis Fringe Benefits [IRC §132(e)]
The value of de minimis benefits provided to employees are excluded
from taxable wages. A de minimis benefit is any property
or service provided that has so little value that accounting for it
would be unreasonable or administratively impractical. For this
purpose, the frequency of providing similar benefits to employees
is taken into account. Cash is not excludable, except for occasional
meal money or transportation fares. Examples
of de minimis benefits include the following.
• Occasional personal use of a company copy
machine if at least 85% of its use is for business.
• Holiday gifts, other than cash, with a low FMV.
• Group-term life insurance payable on the death of an employee’s
spouse or dependent if the face amount is not more than
$2,000.
• 100% of the cost of meals, such as coffee, doughnuts, soft drinks,
or meals provided to enable an employee to work overtime.
• 100% of the cost of meals provided to employees at an
employer-operated eating facility, such as a restaurant
type facility. This applies even if employees
eat their meals immediately before
or after their shift.
• Occasional parties or picnics for employees and their guests.
• Occasional tickets for entertainment or sporting events.
• Transportation, such as providing an employee an occasional
transportation fare for working overtime.
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