Publication 15-B - Employer'S Tax Guide To Fringe Benefits - 2012 Page 17
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33•
Occasional meals or meal money provided to enable
1. The employee was a 5% owner at any time during
the year or the preceding year.
an employee to work overtime. However, the exclu-
sion does not apply to meal money figured on the
2. The employee received more than $115,000 in pay
basis of hours worked.
for the preceding year.
•
Occasional parties or picnics for employees and
You can choose to ignore test (2) if the employee was not
their guests.
also in the top 20% of employees when ranked by pay for
the preceding year.
This exclusion also applies to meals you provide at an
employer-operated eating facility for employees if the an-
Meals on Your Business Premises
nual revenue from the facility equals or exceeds the direct
costs of the facility. For this purpose, your revenue from
You can exclude the value of meals you furnish to an
providing a meal is considered equal to the facility’s direct
employee from the employee’s wages if they meet the
operating costs to provide that meal if its value can be
following tests.
excluded from an employee’s wages as explained under
•
Meals on Your Business
Premises, later.
They are furnished on your business premises.
•
If food or beverages you furnish to employees
They are furnished for your convenience.
qualify as a de minimis benefit, you can deduct
TIP
their full cost. The 50% limit on deductions for the
This exclusion does not apply if you allow your employee
cost of meals does not apply. The deduction limit on meals
to choose to receive additional pay instead of meals.
is discussed in chapter 2 of Publication 535.
On your business premises. Generally, for this exclu-
Employee. For this exclusion, treat any recipient of a de
sion, the employee’s place of work is your business prem-
minimis meal as an employee.
ises.
Employer-operated eating facility for employees. An
For your convenience. Whether you furnish meals for
employer-operated eating facility for employees is an eat-
your convenience as an employer depends on all the facts
ing facility that meets all the following conditions.
and circumstances. You furnish the meals to your em-
•
ployee for your convenience if you do this for a substantial
You own or lease the facility.
business reason other than to provide the employee with
•
You operate the facility. You are considered to oper-
additional pay. This is true even if a law or an employment
ate the eating facility if you have a contract with
contract provides that the meals are furnished as pay.
another to operate it.
However, a written statement that the meals are furnished
•
for your convenience is not sufficient.
The facility is on or near your business premises.
•
Meals excluded for all employees if excluded for
You provide meals (food, drinks, and related serv-
more than half. If more than half of your employees who
ices) at the facility during, or immediately before or
are furnished meals on your business premises are fur-
after, the employee’s workday.
nished the meals for your convenience, you can treat all
meals you furnish to employees on your business prem-
Exclusion from wages. You can generally exclude the
ises as furnished for your convenience.
value of de minimis meals you provide to an employee
Food service employees. Meals you furnish to a res-
from the employee’s wages.
taurant or other food service employee during, or immedi-
Exception for highly compensated employees. You
ately before or after, the employee’s working hours are
cannot exclude from the wages of a highly compensated
furnished for your convenience. For example, if a waitress
employee the value of a meal provided at an em-
works through the breakfast and lunch periods, you can
ployer-operated eating facility that is not available on the
exclude from her wages the value of the breakfast and
same terms to one of the following groups.
lunch you furnish in your restaurant for each day she
works.
•
All of your employees.
•
A group of employees defined under a reasonable
Example. You operate a restaurant business. You fur-
classification you set up that does not favor highly
nish your employee, Carol, who is a waitress working 7
compensated employees.
a.m. to 4 p.m., two meals during each workday. You
encourage but do not require Carol to have her breakfast
For this exclusion, a highly compensated employee for
on the business premises before starting work. She must
2012 is an employee who meets either of the following
have her lunch on the premises. Since Carol is a food
tests.
service employee and works during the normal breakfast
Publication 15-B (2012)
Page 17
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