FAQs - Cellular Phones Policy

The frequently asked questions below are based on the Employee Mobile Communication Policies and Procedures effective February 1, 2006. They are for staff and faculty only.

University Allowance for Individually Owned Cellular Phones and Plans

What kinds of cell phones and plans can I choose from?

why does the university want me to own my cellular telephone, including voice and data plan?

Can I use a cell phone for personal calls when I purchase it with a taxable allowance from the University?

Is the allowance that I receive for my own cellular phone taxable?

How do I know I’m getting a fair allowance?

What if my actual business usage exceeds the amount of the allowance that I receive?

Does everyone get an allowance for a personally owned cell phone?

is my cellular reimbursement included in my salary and counted towards my retirement contributions or other benefits?

How do I know what cellular telephone or monthly plan to choose?

What if my choice doesn’t work out for me?

Do I have the option to get a smart phone – PDA/Phone combination?

What smartphones or pda/phones are recommended?

Even if I don't receive an allowance, as a University faculty or staff member am I eligible for the individual discounts the cellular vendors offer?

University Department Owned Telephones

I only make personal cell phone calls during “free” calling periods, i.e., evenings and weekends, or using “free” cellular to cellular calling.  Because those calls are free, they don’t count, right?

How am I supposed to figure the personal call reimbursement amount?

Under what circumstances can a department own a telephone?

Administrative Procedures

If I am a supervisor, how do I select the correct allowance amount for an employee?

Where can I find the application for setting up my allowance?

What happens after I send my Allowance form into the Payroll Department?

When and how should I expect to see my allowance?

What is the appropriate account number to use for the allowance program?

How can I make a change to the chartfield an allowance is charged to?

If I have questions on the allowance once I receive it who should I talk to?

Can I switch from one provider to another and keep my current phone number? How do I do that?

If I switch from one provider to another provider can I keep my current device?

How do I transfer the ownership of a University owned cellular device to an employee?

What steps do I take to give the device to the employee?

IRS Documentation

Is there an IRS document that outlines their position on the subject of cellular phone taxation?

University Allowance for Individually-Owned Cellular Phones and Plans

What types of cell phones and plans can I choose from?

Visit our website at www.it.utah.edu/services/phones/cellular.php.

why does the university want me to own my cellular telephone, including voice and data plan?

The IRS requires that the business and personal use of University owned cell phones must be documented in a very detailed manner.  While most departments require employees to account for and reimburse personal calls made on University cell phones, no departments are documenting and substantiating to the detail required by IRS rules.  The IRS can declare that all undocumented use is personal and should be taxed as wages, even if the calls were mostly business calls.  Receiving a taxable allowance for an individually owned cell phone removes this detailed documentation requirement.

Can I use a cell phone for personal calls when I purchase it with a taxable allowance from the University?

Yes.  Because you own the phone, you do not have to document personal calls.  You will no longer be required to carry two phones, one for business and the other for personal use.

Is the allowance that I receive for my own cellular phone taxable?

Yes.  The allowance amount is taxable income.  Otherwise you would be required to provide detailed documentation of your business and personal calls.

How do I know I’m getting a fair allowance?

With department approval, you will work with your supervisor to determine how much your allowance will be.  You will receive an amount necessary to pay for required business use.

What if my actual business usage exceeds the amount of the allowance that I receive?

The monthly allowance amount can be adjusted based on actual business usage – or – if your business use spikes one month, you may request an expense reimbursement for un-reimbursed business calls.

Does everyone get an allowance for a personally owned cell phone?

No.  You should only receive an allowance if your job requires that you carry a cell phone where other less expensive means of communication are not adequate, and then only an amount necessary to cover business calls.  Just because someone with your title gets an allowance doesn’t mean that you will if your specific duties do not require the use of a cellular phone.

is my cellular reimbursement included in my salary and counted towards my retirement contributions or other benefits?

No.  The allowance is not part of your salary – it is a taxable reimbursement not included when determining benefits.

How do I know what cellular telephone or monthly plan to choose?

The device and plan you select will be based on several factors.  You should consider both business and personal service coverage.  Your job may not require a camera phone, but you may find a camera phone to be a good option for you personally.  You should consider your calling patterns.  Is unlimited long distance necessary?  Would free mobile to mobile minutes be a plus?  What are the chances that you may exceed your base plan minutes and be required to pay expensive overage minutes?  We recommend that you shop around and speak with the different vendor reps before making a decision. While the University does not endorse this product, you may find this tool useful for determining which cell phone plan best fits your needs. When you have determined which plan suits you, go to the University cell phone page to get the University discount.

What if my choice doesn’t work out for me?

You should take full advantage of any trial periods offered by the vendors.  Pay strict attention to your level of service during that period and return the phone and cancel the plan if you are not receiving the level of service you need.

Do I have the option to get a smart phone – PDA/Phone combination?

If your job requires that you have access to email, calendaring or other PDA functions, your supervisor may approve the purchase of a specific smart phone, PC card or other device that is required to perform your job.  If you want a smart phone, but your job doesn’t require it, you will pay the difference in the allowance amount and the actual cost of a smart phone or other more expensive device.

What smartphones or pda/phones are recommended?

Please see our list of recommended devices.

Even if I don't receive an allowance, as a University faculty or staff member am I eligible for the individual discounts the cellular vendors offer?

Yes! If you are a current University faculty or staff member you are invited to take advantage of any of the discounts offered by the cellular vendors under their individual plans.

University Department Owned Telephones

I only make personal cell phone calls during “free” calling periods, i.e., evenings and weekends, or using “free” cellular to cellular calling.  Because those calls are free, they don’t count, right?

Please refer to your departmental policy; however, if you do make personal calls, you need to document and reimburse for them.

How am I supposed to determine the personal call reimbursement amount?

Example 1

You have a 600 minute plan that costs $40.00 (plus fees and surcharges).  You only used 300 minutes, but 100 of those were personal.  Your total bill is $40.00.  You should pay one third of the total bill.  Use this formula:  100/300 x $40.00.  This equals $13.33 plus the same prorated share of the fees and surcharges.

Example 2

You have a 600 minute plan that costs $40.00 (plus fees and surcharges).  This month you made calls totaling 650 minutes.  Your total bill is $57.50 ($40 plus $.35 per minute over 600 minutes).  Of those minutes, 100 were for personal calls.  You should pay 100/650 x $57.50.  This equals $8.47 for personal calls.  The prorated share of fees and surcharges should also be paid.

Under what circumstances can a department own a telephone?

if it is used 100% for business or if there are other extenuating circumstances such as a shared phone used for on-call, then an exemption can be granted by a Cognizant Vice President or Dean. A Department Cellular Services Agreement must be completed and signed by the individual responsible for the phone, the Department Head, and Cognizant VP/Dean. The completed form is to be retained by the responsible department and available for auditing purposes if necessary.

Administrative Procedures

If I am a supervisor, how do I select the correct cell phone allowance amount for an employee?

The allowance amount must be based on the business requirements of the employee’s position.  Amounts may be selected in $10 increments from $30 to $150.  The $10 dollar increments allow you to select a plan that closely approximates actual business need.

Because the allowance is taxable, the actual amount that an employee receives will be less than the selected allowance amount.  Departments are encouraged to determine an amount based on job function that is fair to the employee and the department. This should consider business usage only and not added personal usage.

A goal of the cellular allowance is to release an employee from burdensome and expensive administrative time spent on cellular usage substantiation requirements. The cost to the employee for this benefit is the reduction of the allowance due to employment taxes such as FICA and any federal and state employment withholding based on the employee's current withholding certificate on file.

It is not an appropriate use of University resources to initiate a personal tax projection for allowance purposes. You may keep in mind the general tax rates of 7.65% for FICA and MEDHI tax and a combined federal and Utah income tax rate of 20% - 30%. Such percentages should apply to almost any University employee on a cellular allowance.

Where can I find the application for setting up my allowance?

The cell phone allowance agreement and procedures form can be found online.

What happens after I send my Allowance form into the Payroll Department?

As long as the Payroll Department receives your Allowance form by the 7th of the month you can expect to receive your allowance on the 22nd of the month it is in effect.

When and how should I expect to see my allowance?

You will see your allowance on the 22nd of the month as a Direct Deposit. You will not receive a paper advice on the allowance. It is available online only through the Campus Information System (CIS) under your Payroll information.

What is the appropriate account number to use for the allowance program?

The following account definitions are found in the Administrative Financials in CIS. We suggest you use an account in one of the defined ranges listed below:

Note that telcom costs may not be charged to Contracts and Grant projects (Fund 5000) unless a telcom category is specifically identified in the contract or grant.

63200 - 63219 Telcom - Monthly Recurring Charges - Telecommunication monthly recurring charges such as telephone line and equipment.

63300 - 63319 Telcom - Other Charges - Telecommunication other charges and credits such as installation and repair charges, network support center hourly charges, cellular monthly plan, and other miscellaneous charges.

63400 - 63419 Telcom - Toll Charges - Telecommunication toll/usage charges such as long distance calls and cellular airtime charges.

63500 - 63519 Telcom - Miscellaneous - Telecommunication costs that should not be appropriately charged to monthly recurring, other charges, or toll accounts.

How can I make a change to the chartfield an allowance is charged to?

To change the chartfield send in a new Allowance form with the new chartfield. Explain what you are asking for in the "comment/explanation" section of the form. The new Allowance Agreement supersedes previously executed agreements.

If I have questions on the allowance once I receive it who should I talk to?

First talk to your manager. You or your manager may need to contact the Payroll Department at 581-7873.

Can I switch from one provider to another and keep my current phone number?  How do I do that?

First of all, decide which company you want to go with.  Refer to the OIT cellular web pages at www.it.utah.edu/services/phones/cellular.php and work through the appropriate representatives of the other providers.

During this short time period you will probably have to carry both your old phone and your new phone.  As soon as the porting of your number is accomplished your service will be available through the new phone only.

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If I switch from one provider to another provider can I keep my current device?

No. Each time you switch from one provider to another you must obtain a device from the new provider. This may even apply if you are changing plans within the cell phone provider environment.

 

If I move from one department to another, can I keep my cell phone?

Please check with the department you are moving from.


How do I transfer the ownership of a University owned cellular device to an employee?

If a cell phone is given to an employee or if the cell phone is no longer needed because the employee is going to a different vendor, a Retirement/Transfer form needs to be completed.

If the cell phone is no longer needed, the phone should be sent to Surplus & Salvage along with the Retirement/Transfer form.

If the cell phone is given to the employee, you are required to determine the value of the cell phone. Contact Property Accounting at 801-581-8673 or 801-581-3973 for help determining the fair market value of the device. The general guideline in effect at the University is that an award to an employee of tangible property with a fair market value of $75 or less does not need to be reported as wages to the employee.

The department is required to self-report how much a high-end device originally cost (good faith effort) and when it was purchased. To self-report use the section defined as "business justification and/or comment and explanation" on the Allowance form.

What steps do I take to give the device to the employee?

Complete the University Retirement Transfer form. The proper code to use is TROFF, which is used to transfer items to another entity off campus. In addition, if the current fair market value of the item is greater than $75, then the entire value of the property needs to be reported as wages. (For a general explanation see www.tax.utah.edu - Employee Awards.) In order to adjust the wages and to ensure the proper University employment tax withholdings are applied, additional information needs to be added to the Retirement/Transfer form. Required information is employee name, employee ID, and total value of property distributed to employee.

IRS Documentation

Is there an IRS document that outlines their position on the subject of cellular phone taxation?

Yes. The IRS has published an article on their website at the following url: http://www.irs.gov/govt/fslg/article/0,,id=167154,00.html

 

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