What is the ruling on working to repair phones suspected of being stolen, and is the income earned from that considered unlawful?

It is impermissible to assist a thief in their theft, and whoever aids them while being aware of their action is sinful, for Allah, the Almighty, says: (And do not cooperate in sin and aggression).

Therefore, it is not permissible for you to format a mobile phone for someone you know has stolen it. The wage received for this is ill-gotten gain that must be disposed of by giving it to the poor and needy. As for what you suspect but are not certain is stolen, it is safer to avoid dealing with it, for the Prophet, peace and blessings be upon him, said: "Leave that which makes you doubt for that which does not make you doubt."