The Small Business Jobs Act of 2010 (“SBJA”) removed cell phones (and “similar telecommunications equipment”) from the definition of “listed property” for taxable years after December 31, 2009. Prior to the SBJA, cell phones provided by employers to their employees were subject to strict substantiation requirements. Employees had to keep detailed records regarding their business versus personal use of cell phones. If employers were unable to obtain the information from employees, they would normally include a percentage (usually between 10 to 20 percent) of the cell phone costs as taxable fringe benefits on their employees’ Form W-2s.
