The Coffee Deduction Is Gone—
Here’s What That Means
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This is one of those tax changes that catches people off guard.
Because nothing about it feels like it should be a problem.
For years, providing coffee, snacks, and small refreshments in the workplace was standard—and deductible.
That changes in 2026.
Here are three points to keep in mind:
- The deduction quietly disappears. What was 50% deductible through 2025 drops to 0% in 2026 for employer-provided break-room food and beverages.
- The twist? Employees still get the benefit tax-free. These items remain classified as de minimis fringe benefits—so the tax burden shifts entirely to the employer.
- Tax Tip: Start identifying these costs now and model the after-tax impact. What used to be a partially deductible expense is now fully nondeductible—this can add up more than you think.
I’ll admit, this is one of those rules that doesn’t feel aligned with how businesses actually operate—but it’s now part of the landscape.