If you provide your employee with a cellular phone (or other handheld communication device) or Internet service at home to help carry out his or her duties, the business use is not a taxable benefit. If part of the use of the phone or Internet service is personal, you have to include the value of the personal use in your employee's income as a taxableBut providing cell phones has its own benefits, too, so it's important for employers to consider as many factors as possible, both pro and con, before deciding to provide employees with cell phones. One of the biggest benefits to giving employees companyowned cell phones is the ability to have everyone using the same hardware and company provided cell phone taxable benefit
Cell phone allowances or the use of employerprovided cell phones may constitute taxable fringe benefits which are included in the employees taxable income and form part of the remuneration for purposes of employees withholding tax.
Cell phones If an employer provides a cell phone for business use, any personal use does not have to be counted as taxable income even if company policy prohibits personal use but the employee violates that policy and Sep 17, 2011 In Notice, the IRS explains that cell phones are often provided by employers not to compensate employees but with what the IRS calls noncompensatory purposes. Translated: the employer iscompany provided cell phone taxable benefit The Internal Revenue Service (IRS) has issued guidance and also a new memo which together clarify the tax treatment of cell phones provided by employers and cell phone reimbursement plans.
It used to be that employees who were given companypaid cell phones or were reimbursed for use of their personal cell phone had a taxable fringe benefit; the amount was determined by the employer. After all, employees could use these phones to call their family or friends, which is clearly personal and not for business. company provided cell phone taxable benefit Employee Benefits Law Report Home Fringe Benefits IRS Rings Up Cell Phone Tax Guidance. IRS Rings Up Cell Phone Tax Guidance By Porter Wright on October 13, 2011. for providing the employee with the cell phone. In the Notice, the IRS provided examples of acceptable business reasons for providing cell phones to employees, If an employer, for substantial business reasons (using the criteria discussed above), requires an employee to maintain and use a personal cell phone for business purposes, then reimbursements for the employees cell phone costs will not be taxable, provided In the notsodistant past, employerpaid cell phones were treated as a taxable fringe benefit, subject to strict substantiation requirements for listed property. But the Small Business Jobs Act of 2010 changed the rules.