Coronavirus Relief Package Brings Back Three-Martini Lunch
Washington, DC, February 12, 2021-The latest emergency Coronavirus relief package, the Consolidated Appropriations Act of 2020 (CAA) passed on December 21, 2020, reverses some of the Tax Cuts and Jobs Act (TCJA) meals and entertainment changes and provides a temporary full deduction of certain business meals.
Explains HHM CPAs, “For example, meal expenses incurred after December 31, 2020, and before January 1, 2023 could be 100% deductible.
“This new tax law represents an emergency Coronavirus relief package and effectively brings back the fully deductible so-called ‘three-martini lunch’ in a sweeping fashion with the expressed intent to stimulate the restaurant and beverage businesses across the country.
“The CAA amends the Tax Reform Act of 1986 by inserting an exception to the 50% meal deduction that includes ‘food or beverages provided by a restaurant, and paid or incurred before January 1, 2023,’ and provides for a full deduction for business meals.”