Business Meals and Entertainment Expenses

If you deduct 100% of certain meal and beverage expenses under Internal Revenue Code, section 274(n)(2)(C), you must add back the portion of those expenses that exceeds the standard 50% limit.

This addback applies to specific industry taxpayers, including, but not limited to:

• Commercial vessels
• Oil and gas platforms
• Fishing vessels

You must add back entertainment and meals that are fully expensed under Internal Revenue Code, section 274(e)(8), when those costs relate to goods and services sold to customers in a bona fide transaction for full consideration and are not part of your active conduct of a trade or business.

The addback amounts are:

• 50% for meal expenses
• 100% for entertainment-related expenses

• Internal Revenue Code 274
• Minnesota Statute 290.0131