Employer-Provided Cell Phones Considered Tax-Free Fringe Benefit

The Small Business Jobs Act of 2010 removed cell phones from the definition of listed property for taxable years beginning after December 31, 2009. On September 14, 2011, the IRS issued guidance to clarify the tax treatment of employer-provided mobiles. Notice 2011-72 explains that the IRS will treat the value of any personal use of a cell phone, provided by the employer primarily for non-compensatory business purposes, as excludable from the employee’s income as a de minimis fringe benefit and thus tax-free. This is effective for all taxable years after December 31, 2009.

For more information, view Notice 2011-72.