Every industry has its own nuances. We take that into consideration and approach business solutions with the specific lens required of your field. Our teams are comprised of talent with relevant experience and we’re prepared to meet every challenge.
CMS Rural Health Transformation Program: Missed Year 1 funding? How to prepare for Year 2 opportunities
Lorem ipsum dolor set
FSG Quarterly Financial Services Update - Q3 2026
Lorem ipsum dolor set
Replay: Financial Services Group Quarterly Accounting and Reporting Update
Lorem ipsum dolor set
Workforce Development: Addressing physician burnout through a holistic operating model
Lorem ipsum dolor set
What ESOP sellers need to know about Section 1042 rollovers
Lorem ipsum dolor set
The One Big Beautiful Bill Act (OBBBA) brings new rules for meals and entertainment deductions beginning in tax years after December 31, 2025. While the categories haven’t changed much, the deductibility rules have. For business owners, this means far fewer employer provided meals will qualify. Only a limited set of specific situations will still allow a deduction under the new law.
At a Glance
Entertainment costs stay nondeductible (with only a few narrow exceptions).
Business meals remain 50% deductible, but you still need proper documentation and a clear business purpose.
Employer-provided meals become mostly nondeductible, including snacks, coffee, overtime meals, and meals served in on-site cafeterias. Exceptions include:
Meals provided by restaurants to their employees
Meals on fishing vessels
Meals sold to the public at full price in employer-operated cafeterias
Below is a table summarizing the changes:
Action Steps for Employers
Since the OBBBA significantly limits the deductibility of employer-provided meals, most businesses will need to make some operational and accounting adjustments. As you prepare for the 2026 tax year, consider the following:
Review how your company currently provides meals and snacks. Identify where food is being offered (e.g., break rooms, cafeterias, meetings, overtime support) and determine which items will no longer be deductible.
Update internal policies and communication. Employees may need clarity on what qualifies as a business meal going forward. Simple updates to handbooks, expense policies, or manager guidance can prevent confusion.
Adjust your accounting and tax processes. You may need new general ledger categories, revised tracking procedures, and updated tax provision and return calculations to reflect the new limitations.
Evaluate operational and financial impact. For companies with cafeterias or regular meal offerings, it may be worth assessing costs, pricing, and whether changes to operations make sense under the new rules.
We Can Help
The Elliott Davis team helps business owners adapt to the new tax requirements and the strategic decisions that follow. We can assist with policy updates, recordkeeping, and planning so you’re well prepared for the 2026 tax year. Contact us to discuss how these changes may affect your business and what steps to take next.
The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.
How one construction firm achieved growth through organizational realignment
Discover how a construction firm drove sustainable growth through strategic organizational realignment. This case study outlines key leadership and operational changes that enabled a smooth transition and continued success.
June 3, 2025
Tax Thursday in Three (Extended Version): May 29, 2025
Elliott Davis provides quick updates on the 2025 tax legislation package
Video
May 29, 2025
Selling DME in South Carolina? Don’t stop collecting sales tax yet
Description: Stay compliant with South Carolina's new DME sales tax rules. Learn why vendors must still collect tax, what the recent court ruling means, and how upcoming guidance may impact your refund or filing obligations.
May 29, 2025
10 ways to get your construction business audit-ready
Discover 10 practical ways to get your construction firm audit-ready, from improving job costing and WIP reporting to strengthening GAAP compliance and meeting debt covenant requirements.
Article
May 27, 2025
Strategic market positioning: How benchmarking fuels smarter business decisions
Discover how strategic benchmarking helps healthcare practices improve pricing, staffing, and investment decisions. Learn a 5-step approach to align internal data with industry standards.
May 21, 2025
The rising cost of a healthcare data breach
Discover why healthcare breaches now cost $9.8 million on average and what proactive steps your organization can take to reduce risk, avoid fines, and protect patient data.