As employees continue to work from home, using their landlines or cell phones and internet access for business, are employers required to reimburse them for these costs? Some states, including California, DC, Illinois, Iowa, Massachusetts, and New York say yes. If employers must or choose to make reimbursements, it’s advisable to do so through an accountable plan. This makes reimbursements deductible by the company but tax free to employees (and not subject to employment taxes). Accountable plans are explained in IRS Publication 463.
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