IRS clarifies restaurant deduction for per diems

 

The IRS recently released guidance (Notice 2021-63) clarifying that a meal per diem may be treated as attributable to food or beverages provided by a restaurant and is therefore eligible for the 100% deduction.

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 suspended the 50% limit on business meals deductions for food or beverages provided by a restaurant in 2021 and 2022, otherwise allowing meal expenses a full 100% deduction. Notice 2021-25 offered guidance on what constitutes a restaurant, but did not address whether per diem meal deductions are eligible for the 100% deduction.

Notice 2021-63 provides that per diem meal deductions that are allowable under the general rules are eligible for the 100% deduction and taxpayers do not have to substantiate that a per diem was used at a restaurant.

 

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