According to the IRS, the same rules that apply to employees’ tax-free use of cellphones and smartphones also apply to tablets, such as iPads. Under those rules, if you have a noncompensatory business reason for providing employees with cellphones/smartphones (e.g., you need to contact employees at any time for work-related emergencies), their business use is a tax-free working conditionand their personal use is a tax-free de minimis fringe.
For employees who use their own phones for business, you may reimburse them for their basic monthly data, text and voice charges. Bonus: Employees don’t need to keep any records of their personal and business use.
PRACTICE TIP: Equipment provided to employees to promote morale or good will, attract new employees or as additional pay isn’t provided for substantial noncompensatory business purposes. Employees’ personal use is fully taxable and they’ll have to keep all the usual business records delineating their personal and business use.