Thanks for Lunch!

The IRS is auditing employers that provide cost-free and tax free meals to employees, and changes to the existing regulations will most likely be forthcoming.

For now, these conditions qualify for tax-free employer-provided meals:

  • De minimis value meals for an occasional team-building meeting or picnic
  • Meal money given to an employee who must work late occasionally
  • Meals provided in a company cafeteria, if the annual revenue equals or exceeds its direct operating costs
  • Meals for employees who must stay at work for emergencies or to handle customer issues
  • Meals for employees because the workload requires brief meal breaks or the work location is so remote that employees can’t eat out

The IRS will find that your meals are taxable if you:

  • Let employees choose cash or meals
  • Don’t have a reasonable record of emergencies or customer issues that need to be handled; in other words, don’t create a situation just so you can bring in a meal
  • Define your work location as “remote” by ridiculously small boundaries
  • Don’t consider alternative ideas to brief meal breaks, like extended work days or staggered meal times

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HR Bonnie Fielder , H&P Technologies, Inc.

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