University of California Cell Phone Policy - Suspended
University wins reprieve from cell phone taxation
The University of California cell phone policy, Business and Finance Bulletin G-46, implemented in June 2009 is being suspended until at least January 31, 2010. This policy required employees with university-owned cell phones to pay federal and state taxes based on an imputed cash value of their university cell phone and cell phone plan. The University has been providing a cash allowance to offset the additional taxes. The policy was in response to outdated tax laws that treat cell phones as fringe benefits even though they have become commonplace business tools.
The suspension was granted by the IRS in response to an appeal from President Yudof. It is based on the assumption that the Mobile Cell Phone Act of 2009 (H.R. 690 and S. 144), introduced this year to modernize the tax treatment of employer-provided cell phones, will be approved by Congress. If the legislation is not passed, the IRS has agreed to consider an additional extension for the University.
No action required on the part of employeesUCOP is automating the modifications to PPS. The cell phone imputed income and cash allowance DOS codes (CEL and CE2) which are currently established in PPS for employees with University-provided cell phone equipment will be automatically modified to include the following end dates:
- Monthly-paid employees: September 30, 2009
- Biweekly-paid employees: October 3, 2009
The script that will end the existing PPS cell phone related distributions will run the evening of Monday, October 12. The changes will be visible in PPS on Tuesday morning, October 13.
As of October 28 and October 30, 2009 for biweekly and monthly-paid employees, respectively, the imputed income and cash allowance to offset the additional tax withholding will no longer appear on employees' earnings statements.
For more informationQuestions about this policy should be directed to the PPS Help Desk:
phone: 530-752-7750
email: ppshelp@ucdavis.edu
or to departmental Payroll Specialists.
- CFO Letter 10-2-2009
- President Yudof's Letter to the IRS 8-10-2009
- Joint Letter to House Ways and Means Committee
- Joint Letter to Senate Finance Committee