Unified Court System Bulletin No. UCS-268

Prepaid Legal Service Benefit for Unified Court System (UCS) Employees
Date Issued
October 12, 2018


To inform agencies of the processing of the 2018 Prepaid Legal Service Benefit

Affected Employees

Employees represented by Communication Workers of America (CWA), Local 1180 in bargaining unit SD

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

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 06390 & 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

Note: The Zip code criteria is only applicable to members of District Council 37.


Pursuant to Internal Revenue Code Section 61, certain fringe benefits including employer-funded group legal service benefits are considered taxable income. Therefore, the value of this benefit will be added to the employee’s taxable gross wages, for tax withholding purposes, and reflected on the 2018 Form W-2 (Wage and Tax Statement).

Effective Date

Paychecks dated November 14, 2018 (Administration)

OSC Actions

OSC will automatically apply the Prepaid Legal Service Benefit for the 2018 calendar year for employees who were in a status of Active or Paid Leave and received salary from a position in Bargaining Unit SK or SD at any time during calendar year 2018. 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 $89.00 PL5

District Council 37 has determined that nonresident aliens are also eligible to receive this benefit. The Earnings Codes used to process the benefit for nonresident aliens who meet the criteria stated above are as follows:

Earnings Code NRA Income Code

Effective in 2018, inactive employees who incur a current year Social Security and/or Medicare tax deficiency as a result of the application of the prepaid legal benefit, will have their Form W-2 (Wage and Tax Statement) wages (Federal, State, and Local, if applicable) grossed up (increased) for any outstanding balance.Employees will now be responsible for the payment of any additional income taxes that result.

Control-D Report

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

Tax Information

The Prepaid Legal Service benefit is supplemental taxable income, will be added to the employee’s taxable gross wages, for tax withholding purposes, and is subject to employment and income taxes.

Federal, State, and New York City income tax withholding will be calculated using the Aggregate method. Yonkers income tax withholding will be calculated using the Flat Rate method. Yonkers Flat Rate Withholding is 1.61135% for Yonkers residents and 0.50% for Yonkers non-residents.

Agency Actions

Agencies should notify affected employees.

Payroll Register and Employee’s Paycheck/Advice

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


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