Feed Your Harvest Crew and Deduct the Meals
We got this question from one of our readers and it would apply to almost any farmer who hires a harvest or planting crew:
“Hi Paul, I was wondering how taxes work on food bought for workers. On our family farm we have a couple part time hired hands who work 200-300 hours a year between planting and harvesting. When working my mother feeds them quite well. Big lunches, dinners, sodas, cookies, deserts, etc. I was wondering if these food purchases are tax deductible? Also, do you know of any good farm tax resources for me to study so I could get a better idea of taxes in relation to farming.”
Normally, meals are deductible to an employer at 50% of the cost of the meals. However, in this case, where the meals are provided to the employee on the employer’s work site and for the convenience of the employer, the meals are completely 100% deductible by the employer and the employee does not have to pick up any of it as income.
The rationale behind this is that the harvest crew does not have time to run into town to get a meal and it is more productive for the farmer to provide the meals directly on site and get the job done. Therefore, the tax laws allow the farmer to deduct the meals in full.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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