Tax Reporting and Filing Flashcards

What is a W-2c and when must it be issued?

Answer: A corrected W-2 issued when an error is discovered after the original W-2 was filed or furnished

Form W-2c corrects previously filed W-2 information and must be issued whenever errors in wages, taxes, or other reportable items are discovered after the original W-2 was furnished.

Which ADP feature notifies the payroll team of upcoming state unemployment tax (SUTA) rate changes?

Answer: ADP SmartCompliance Tax Rate Notification

ADP SmartCompliance automatically notifies clients of state unemployment tax rate changes and updates the rates in the system upon verification.

What is the Social Security wage base for 2024 and how does ADP handle employees who exceed it?

Answer: $168,600; ADP automatically stops Social Security withholding once an employee's YTD wages exceed the wage base

The 2024 Social Security wage base is $168,600, and ADP automatically ceases Social Security withholding once year-to-date wages reach that threshold.

An employer receives a penalty notice from the IRS for a late payroll tax deposit. What is the first step using ADP SmartCompliance?

Answer: Submit the penalty notice through SmartCompliance for ADP's tax filing team to research and respond

ADP SmartCompliance clients submit IRS and agency notices through the portal so ADP's tax experts can research, prepare a response, and resolve the issue on the employer's behalf.

What is the difference between Form 940 and Form 941 in the context of ADP tax filing?

Answer: Form 940 is the annual FUTA return; Form 941 is the quarterly return for federal income, Social Security, and Medicare taxes

Form 940 is the annual FUTA employer tax return, while Form 941 is filed quarterly to report federal income tax withheld plus Social Security and Medicare taxes.

In ADP, which tax deposit schedule applies to employers with a lookback period tax liability of $50,000 or less?

Answer: Monthly deposit schedule

Employers whose total lookback period tax liability was $50,000 or less are classified as monthly depositors and must deposit employment taxes by the 15th of the following month.