Is the value of employer-provided meals taxable income to an employee?
Author: Alice Gilman
No. An employer may exclude the value of meals from an employee's income if the meals are provided in-kind and the meals are furnished on the employer's premises and for the employer's convenience.
Meals are furnished for the employer's convenience if the employer has a substantial noncompensatory business reason for providing meals to employees. The following reasons qualify as substantial noncompensatory business reasons for providing meals to employees:
- Employees are provided with meals because they must remain available for emergencies during their meal periods. The employer must be able to prove that emergencies have occurred in the past or can reasonably be expected to occur in the future.
- Meals are provided to employees who are restricted to short meal periods and who could not be expected to eat elsewhere in such a short period of time.
- Meals are provided to employees who could not otherwise eat a proper meal in a reasonable amount of time.
- Meals are provided to food service employees during or immediately before or after their shifts.
- Meals are provided to employees directly after their shifts, if the employer would have had a substantial noncompensatory business reason for providing meals during employees' working hours.