The Car and Truck Fleet and Leasing Management Magazine

IRS Ruling Makes Employer-Provided Cell Phones Non-Taxable

October 04, 2011

WASHINGTON – In September, the IRS issued Notice 2011-72, which gives employer-provided cell phones a different status, that of a non-taxable de minimis fringe benefit. This means that when an employer provides a cell phone for business purposes, and not part of any kind of compensation, business and personal use of the phone is generally non-taxable to the employee. In addition, the IRS won’t require employers to keep records of business use of the phone to receive this non-taxable status.

The notice is effective for all taxable years after Dec. 31, 2009 or Jan. 1, 2010, for individual taxpayers.

Before 2010, the IRS considered cell phones as “listed property.” An employer who gave cell phones to employees had to meet higher substantiation requirements to be able to claim the phone, and related costs (cell phone service, data plan, etc.) as non-taxable.

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