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Meals at Meetings Under the New OBBB Rules
I’ve seen discussion in for-profit spaces about the One Big Beautiful Bill making meals provided for the employer’s convenience non-deductible as of January 1, 2026. How does this affect nonprofits? If we provide lunch at a mid-day meeting, for example, should we be running it through payroll now?
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3 Replies
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Hi Erin – This doesn’t really affect nonprofits, unless they have meals directly related to unrelated business income, which previously they may have been able to use as an expense to offset that UBI. Otherwise, since nonprofits generally do not owe/pay annual revenue taxes, meals would continue to be just a regular “other” natural expense for reporting on the 990s.
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The same rules apply to nonprofits since we follow the same tax code. If the meal is for your convenience as the employer, it is not deductible and could be taxable to employees. Mid-day meetings usually count as convenience, so yes, you might need to run it through payroll
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The new rules apply to nonprofits too. Starting in 2026, most employer-provided meals, including working lunches, are no longer deductible as a business expense.
Yes, running it through payroll is the primary workaround. If the meal’s value is included in an employee’s taxable income and reported on their W-2, you can deduct it fully as compensation.
