That complimentary cup of coffee in the break room just got a lot more expensive.
Many business owners don’t realize that one of the more overlooked provisions of the Tax Cuts and Jobs Act officially took effect this year. As of 2026, the cost of providing everyday break-room refreshments—coffee, bottled water, soft drinks, doughnuts, snacks, and similar items—is no longer tax deductible.
For years, these workplace amenities were considered a small but worthwhile business expense. Employees received the benefit tax-free, and employers were allowed to deduct at least a portion of the cost. That changed in 2026, when the remaining 50% deduction quietly disappeared.
Now businesses pay 100% of the cost while receiving 0% tax deduction.
For many companies, the annual expense may seem insignificant. But for employers with dozens—or even hundreds—of employees, break-room refreshments can easily add up to thousands of dollars each year. Losing the deduction increases the true after-tax cost of providing these perks.
That doesn’t necessarily mean you should empty the coffee pot.
Many employers view complimentary refreshments as an investment in employee satisfaction, productivity, collaboration, and workplace culture. Employees who remain on-site during breaks often spend more time working together and less time away from the office.
The key is to understand that these expenses now carry a different tax treatment than they did just a year ago.
If your business provides employee refreshments, now is a good time to:
- Review how much you’re spending annually on workplace snacks and beverages.
- Make sure these expenses are being recorded as non-deductible in your accounting records.
- Evaluate whether the value these amenities provide to your workforce still justifies the additional after-tax cost.
Tax law changes don’t always make headlines. Sometimes they’re as ordinary as the coffee in your break room—but they can still affect your bottom line.
If you’re unsure whether your business is properly accounting for meals, entertainment, and employee benefits under the current tax rules, the professionals at Saunders Tax & Accounting can help you identify hidden tax issues before they become costly surprises.
As with all tax related questions, nothing is cut and dry. For help with your business expenses, contact Saunders Tax & Accounting at http://www.saunderstax.com or call us at 301-714-2071. Open Monday – Thursday, 9 am to 5 pm. Awarded the Hagerstown Hot List 2026 and Hagerstown Chamber of Commerce “2023 Small Business of the Year” by providing a Less Taxing Life and More Prosperous Solutions since 1984!
