Food and beverage expense deduction

For tax year 2022, individuals must make an addition on their Colorado returns for a portion of any business deduction claimed for food and beverage expenses. In general, the allowable federal deduction is limited to 50% of the expense. However, for tax years 2021 and 2022, section 274(n)(2)(D) of the Internal Revenue Code generally permits deduction of 100% of the expense for food and beverages provided by a restaurant. The required addback is equal to the amount of the deduction claimed in excess of 50% of the expense.