Bulletin: $10 Mobile Equipment Deduction Eliminated (Posted October 11, 2010)
The recently passed Taxpayer Assistance Act of 2010 (Act) eliminated the requirement for strict substantiation of business use of employer-provided cell phones. Prior to the adoption of the Act, the Internal Revenue Service (IRS) had established stricter rules about personal use of certain items provided by an employer, including cell phones. To comply with these rules, Stanford implemented a policy requiring a $10 monthly reimbursement for employee personal usage of mobile equipment in excess of a certain percentage. With the passage of the Act, this requirement has been eliminated effective immediately. Deductions taken from the September 7, 2010 paychecks were the final deductions under the previous policy.
Nonetheless, it is still required that employers demonstrate a reasonable business need when providing mobile equipment or services to an employee. It is recommended that the business need be reviewed at least yearly and adjustments made if required. Please see Mobile Equipment for additional compliance information, including a link to a template that can be used. Administrative Guide Memo 81.3, Provision of Mobile Equipment and Related Services, will be updated December 15, 2010 to reflect this change in policy.