Here’s how the Tax Cuts and Jobs Act (TCJA) applied its tax reform to your supper money meal allowance and the four rules that give you the tax deduction.
Before tax reform, you deducted 100 percent of the supper money cost. Now, because of tax reform, your tax deduction for supper money is subject to a 50 percent cut for amounts paid during tax years 2018 through 2025.
The regulations allow supper money as an excludable fringe benefit when the benefit satisfies the following four conditions:
If the payment of supper money does not meet the four rules, it is taxable compensation to the recipient and if that’s an employee, the money is subject to withholding and payroll taxes. (This makes for unhappy employees.)
If you would like my help with your supper money payments, please reach out to your team at Luster Tax Consulting to discuss.
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