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L. <br />City of <br />Pequott <br />Lakes— <br />AGENDA ITEM #11.2 <br />REPORT TO <br />CITY COUNCIL <br />Date: October 4, 2011 <br />Subject: Amendment to Cell Phone Policy <br />Report: There has recently been an amendment to the tax <br />law relating to employers that reimburse employees for the <br />business use of an employee's personal cell phone. The <br />change states that a reimbursement arrangement with the <br />employee "does not result in additional income or wages." <br />Therefore, the additional income (stipend) should not be <br />counted as taxable income. <br />Staff is proposing the following amendment to the cell - <br />phone policy: <br />Page 2 - Delete the following sentence on page two of the <br />policy: <br />"The stipend is considered an employee taxable benefit and <br />will be included as wages on the employee W -2." <br />