Meal, entertainment and fringe benefit changes. There are five changes to note in this area, all effective for amounts incurred or paid after Dec. 31, 2017:
- (1) Deductions for business-related entertainment expenses are disallowed.
- (2) The 50% limit on the deductibility of business meals is expanded to meals provided through an in-house cafeteria or otherwise on the premises of the employer.
- (3) Deductions for employee transportation fringe benefits (e.g., parking and mass transit) are denied, but the exclusion from income for such benefits received by an employee is retained (except in the case of qualified bicycle commuting reimbursements).
- (4) No deduction is allowed for transportation expenses that are the equivalent of commuting for employees (e.g., between the employee’s home and the workplace), except as provided for the safety of the employee. However, this bar on deducting transportation expenses doesn’t apply to any qualified bicycle commuting reimbursement, for amounts paid or incurred after Dec. 31, 2017, and before Jan. 1, 2026.
- (5) For purposes of the employee achievement award rules, “tangible personal property” does not include cash, cash equivalents, gifts cards, gift coupons, gift certificates (other than where the employer pre-selected or pre-approved a limited selection) vacations, meals, lodging, tickets for theatre or sporting events, stock, bonds or similar items. and other non-tangible personal property.
If you have questions on the changes to meals and entertainment, please Contact Us.