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Date: November 9, 2010

Bulletin Number: UCS-162

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Subject

Prepaid Legal Service Benefit for Unified Court System (UCS) Employees.

Purpose

To explain processing of the 2010 Prepaid Legal Service Benefit for tax purposes.

Background

In accordance with the Internal Revenue Code, Section 61, it is required that the value of employer-funded group legal service benefits be considered as reportable income for each covered employee.  Therefore, the value of this benefit will be added to the employee’s earnings and reflected on the 2010 Form W-2 (Wage and Tax Statement).

Affected Employees

Employees represented by District Council 37 in bargaining unit SK who reside within the following zip codes:

New York City

Zip Codes

Brooklyn

112XX

Bronx

104XX

Queens

110XX, 111XX, 113XX, 114XX

Manhattan

100XX, 101XX, 102XX

Staten Island

103XX

 

 

New York State

Zip Codes

Nassau County

110XX, 115XX, 116XX, 117XX, 118XX

Suffolk County

117XX (except 11719, 11764, 11778, 11786, 11789 & 11792)

Westchester County

105XX, 106XX, 107XX, 108XX

Rockland County

10901, 10911, 10913, 10920, 10923, 10927, 10931, 10952, 10954, 10956, 10960, 10962, 10964, 10965, 10968, 10970, 10974, 10976, 10977, 10980, 10982, 10983, 10984, 10986, 10989, 10993, 10994

Also affected are all employees who are represented by Communication Workers of America (CWA), Local 1180 in bargaining unit SD.

Note: Zip code criteria only apply to members of District Council 37.

Effective Date(s)

Paychecks dated December 8, 2010 (Administration).

OSC Actions

OSC will automatically apply the Prepaid Legal Service Benefit for the 2010 calendar year for employees who were in a status of Active or Paid Leave and received pay from a position in one of the bargaining units at any time during calendar year 2010.  Listed below are the unions, bargaining units, values of the Prepaid Legal Service Benefit and the Earnings Codes:

Union

Bargaining Units

Value

Earnings Code

District Council 37

SK

$107.00

PL3

 

 

 

 

CWA, Local 1180

SD

$88.00

PL5

DC 37 has determined that nonresident aliens are eligible to receive this benefit.  Earn Codes to process the benefit for nonresident aliens who meet the criteria above are as follows:

Earn Code

NRA Income Code

XPL

IC 17

YPL

IC 18

ZPL

IC 19

If an employee is inactive at the time the benefit is applied, a Social Security and Medicare tax deficiency will be incurred.  OSC will set up Social Security and Medicare tax deficiency deductions in 2011 for these employees. Should the employee return to the payroll  the deficiency will be recovered through a deduction from their paycheck.

Control-D Report

Control-D report NPAY771 (Time Entry Payment Report) will list all employees for whom the Prepaid Legal Service Benefit was applied.

Agency Actions

Agencies should notify affected employees.

Payroll Register and Employee’s Paycheck/Advice

The applicable earnings code and the value will be displayed on the payroll register and the employee’s paycheck stub or direct
deposit advice.

Questions

Questions regarding this bulletin may be emailed to the Tax and Compliance mailbox.