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CPP - Certified Payroll Professional Exam 2023
When calculating an employee's net pay, all of the following amounts are subtracted from gross earnings except: correct answer Taxable Wages The minimum salary requirement does not apply to exempt professional employees who are: correct answer Teachers working in an educational institution What is the daily housing amount for the foreign housing cost exclusion for 2023? correct answer 52. Under a Sec. 125 plan, all of the following benefits are qualified benefits EXCEPT: correct answer Deferred compensation to a 457(b) plan When correcting Form 941, Line 2, Wages, tips, and other compensation, file Form: correct answer 941-X An employee who is supporting another family has $600.00 semimonthly disposable earnings. The employee's child support payments are $580.00 semimonthly and more than 12 weeks in arrears. Under the CCPA, calculate the maximum amount that can be deducted from the employee's pay for child support. correct answer $330. The maximum holding period for §401(k) plan contributions is: correct answer The 15th business day of the following month the deferral occurred If an employee's net pay results in negative net pay, which of the following deductions can be reduced or eliminated to bring the check to $0? correct answer Voluntary deductions Which of the following workers is an independent contractor? correct answer A commercial artist furnishing her own tools and equipment
What determines the tax liability in the event of an off-cycle check? correct answer When the employee receives the check Under the FLSA white-collar exemption rules, an exempt outside sales employee will meet all of the following requirements EXCEPT: correct answer Being paid a salary of at least $684.00 a week Contributions to Health Savings Accounts may be made by: correct answer Employer and employee Which of the following payroll issues are governed only by the states? correct answer Unclaimed wages Which form is used by a local government employer when withholding only Medicare tax? correct answer Form 941 Due to poor accounting procedures and negligence, a company underdeposited its 2023 payroll tax liability by $11,000.00. The error was corrected within five days of the due date. The company's total federal income, social security, and Medicare tax liability was $150,000.00. The company may be subject to: correct answer Penalties for late deposit The first step taken when giving employees the latitude to develop their own methods for achieving results is to: correct answer Establish the desired results Reflective listening is: correct answer Restating what you understand from the other's statements An experienced systems analyst is having difficulty instituting state-mandated changes in handling child support payments. Although working overtime, he struggles with the legal requirements and the program is not operational. What style of management is most likely to be effective in handling the employee's performance gap? correct answer High task, high relationship
In order for an employee receiving disability benefits from a third-party insurer to have federal income tax withheld from the payments, what form must be submitted to the insurer? correct answer Form W-4S An employer has been authorized by an employee to make deductions from the employee's wages for union dues and health insurance. In what order must the employer withhold these deductions? correct answer Any order the employer chooses Under the concentration test, a cafeteria plan is not discriminatory if benefits provided to key employees do not exceed: correct answer 25% An employee, paid $2,000 biweekly, has a marital status of Married, claiming 2 allowances on Line 5 of a 2019 Form W-4. $50 is entered in the box on Line 6. Using the Percentage Method for Manual Payroll Systems (Worksheet 5), calculate the federal income tax amount to be withheld for the pay period. correct answer $165. Step 1:Adjust the employee's wage amount by reducing the gross wages by any nontaxable wages. Multiply the number of allowances claimed on Form W-4 by the amount of one allowance found in Table 7 = $330 (2 x $165). Subtract $330 from $2,000 ($1,670). This is the Adjusted Wage Amount. Step 2: To calculate the Tentative Withholding Amount, find the row in the biweekly Percentage Method table containing $1,670. Subtract column A from the adjusted wages. Multiply the result by the % in Column D. Add the result to the amount in Column C. This is the Tentative Withholding Amount. Step 3: Add the amount entered in the box on Line 6 from the 2021 Form W-4 to the Tentative Withholding Amount. The result is the amount to withhold for federal income tax. Fraudulently under-depositing payroll taxes may incur an additional penalty of: correct answer 75% Health Reimbursement Arrangements (HRAs) are paid for by: correct answer Employers only
Which of the following statements is true concerning group-term life insurance provided to employees? correct answer Employers are not required to withhold federal income tax when the value of an employee's group-term life insurance coverage is over $50,000.00. Which of the following statements is true regarding 401(k) plans? correct answer 401(k) plan deferrals are not subject to federal income tax when deferred The foreign base housing amount is what percentage of the foreign earned income exclusion? correct answer 16% When an employee's YTD wages exceed the social security maximum wage base ($160,200.00) but are less than $200,000.00, what adjustment, if any, is made in the gross-up formula? correct answer The social security tax rate is not used Form 1042-S must be provided to the recipient by: correct answer March 15 A procedure that can be put into place in a one-person payroll department to ensure adequate controls is to have: correct answer A list of employees paid provided to department heads Which of the following employer-paid meals or lodging is taxable? correct answer Meals while moving from an old home to a new home Which account is identified correctly? correct answer Cost of employee benefit programs - Expense Which of the following types of compensation is taxable income? correct answer Back-pay awards State unemployment taxes are used to fund: correct answer Unemployment benefits
When would an employee have negative net pay? correct answer Total deductions exceed gross wages Which of the following statements is true regarding 401(k) plans? correct answer In 2023, the maximum 401(k) deferral for employees under 50 years of age to a 401(k) plan is $22,500.00. PreviousNext All of the following factors define a key employee in cafeteria plan nondiscrimination testing EXCEPT: correct answer Any employee with compensation exceeding $120, Voiding a check issued in error in a prior year after all returns were filed requires all of the following procedures EXCEPT: correct answer A refund to the employee Which of the following workers can be classified as an exempt employee? correct answer An executive assistant earning $949.00 each week exercising discretion while performing duties How does imputed income impact an employee's net pay? correct answer Decreases net pay An employer is required to transfer an employee's 401(k) deferral into the trust fund: correct answer As soon as it can reasonably segregate the funds from general assets In determining the source of income for services performed by a nonresident alien partly inside and outside the U.S., compensation may be determined based on any of the following procedures EXCEPT: correct answer On the date the employee returned to full-time U.S. employment. Coaching is appropriate when: correct answer Improving an employee's skills
Which of the following health insurance arrangements are taxable? correct answer Discriminatory benefits provided in a self-insured plan to highly compensated employees A National Medical Support Notice requires an employer to: correct answer Honor the qualified medical child support order When an employee receiving payments from a third-party sick pay provider fails to complete Form W-4S, how much, if any, federal income tax is withheld from the payments? correct answer No federal income tax is witheld A company contributes $350.00 each month to a qualified §125 plan for medical insurance. In addition, $100.00 is contributed to a dependent care flexible spending account. How are these amounts taxed? correct answer $450.00 is not taxable income Under the FLSA white collar exemption rules, an exempt administrative employee must meet all of the following requirements EXCEPT: correct answer Managing a customarily recognized department An employer provided an employee with a $9,500.00 below-market loan. Although the current IRS rate of interest is 7%, the employee pays only 4%. Calculate the imputed interest income, if any, that must be reported as federal taxable wages on the employee's Form W-2. correct answer $0. A computerized payroll system can increase the accuracy of employee paychecks by: correct answer Reducing human error Employer health plan contributions are excluded from employment taxes (social security, Medicare, and FUTA) if the: correct answer Payments are made under a plan Payments to a statutory nonemployee are reported on Form: correct answer 1099-NEC
The payment of a creditor garnishment withheld from an employee's wages will: correct answer Decrease both assets and liabilities When using the Optional Flat Rate Method, by what percentage is a bonus divided when grossing up for employees with YTD wages less than $160,200.00 with no state or local withholding taxes? correct answer 70.35% If a carwash employee receives and reports $20.00 or more in tips in a calendar month, employers: correct answer Must withhold federal income, social security, and Medicare taxes on the tips The Debt Collection Improvement Act (DCIA) authorizes federal agencies to: correct answer Garnish an employee's wages without a court order for delinquent nontax debt owed to the United States A validity edit does all the following processes EXCEPT: correct answer Ensure all data is correct
