Beginning 1/1/21 through 12/31/22, the temporary exception allows a 100% deduction for food or beverages from restaurants, as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances. Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption. However, restaurants do not include businesses that primarily sell pre-packaged goods not for immediate consumption, such as grocery stores and convenience stores.
News Release IR 2021-79 and Notice 2021-25.