ABA Payroll Processing & Compliance 3

Question 1

An employer misclassifies a worker as an independent contractor when they should be an employee. Under Section 3509, what is the reduced withholding rate for federal income tax if the employer did NOT intentionally disregard withholding rules?

Accepted Answer

1.5%

Answer

Under IRC Section 3509, unintentional misclassification results in a reduced federal income tax withholding rate of 1.5% of wages.

Question 2

What is the lookback period used to determine an employer's payroll tax deposit schedule for 2024?

Accepted Answer

July 1, 2022 – June 30, 2023

Answer

The lookback period for 2024 is July 1, 2022, through June 30, 2023; total taxes reported during this period determine monthly or semi-weekly status.

Question 3

Which payroll register column would an accountant reference to verify that the correct amount of child support was garnished from an employee's paycheck?

Accepted Answer

Involuntary deductions

Answer

Court-ordered child support garnishments are classified as involuntary deductions in the payroll register.

Question 4

Under ERISA, a 401(k) participant deferral withheld from an employee's paycheck must generally be remitted to the plan within how many business days for small plans?

Accepted Answer

7 business days

Answer

For small plans (fewer than 100 participants), the DOL safe harbor allows remittance within 7 business days after withholding.

Question 5

Which state-level payroll tax funds California's paid family leave and state disability insurance programs?

Accepted Answer

SDI (State Disability Insurance)

Answer

California's SDI tax, withheld from employee wages, funds both the State Disability Insurance and Paid Family Leave programs administered by the EDD.

(ABA) Accredited Business Accountant Practice Test

(ABA) Accredited Business Accountant Practice Test

ABA Payroll Processing & Compliance 3