APA Taxation and Compliance 4

Question 1

Under the CCPA, what is the maximum percentage of disposable earnings that can be garnished for ordinary creditor garnishments?

Accepted Answer

The lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage

Answer

The Consumer Credit Protection Act limits ordinary garnishments to the lesser of 25% of disposable earnings or the amount exceeding 30 times the federal minimum hourly wage.

Question 2

Which form does an employer file annually to reconcile federal income tax withheld and FICA taxes for the year?

Accepted Answer

Form W-3

Answer

Form W-3 is the transmittal form that reconciles and summarizes all W-2s filed with the Social Security Administration for the year.

Question 3

What is the lookback period used to determine whether an employer is a monthly or semi-weekly depositor for the current year?

Accepted Answer

July 1 of the second preceding year through June 30 of the prior year

Answer

The lookback period is July 1 of the second preceding year through June 30 of the immediately preceding year.

Question 4

Which type of cafeteria plan allows employees to carry over up to $660 (2024 limit) in unused health FSA funds to the next plan year?

Accepted Answer

Carryover provision

Answer

The carryover provision under IRS Notice 2013-71 allows plans to permit employees to carry over a limited amount of unused FSA funds to the following plan year.

Question 5

A new employee hired on November 1 fails to submit a Form W-4. How should the employer withhold federal income tax?

Accepted Answer

Withhold at the highest tax rate as if single with no adjustments

Answer

If an employee fails to furnish a W-4, the employer must withhold as if the employee is single with no other adjustments — the highest default withholding.

(APA) American Payroll Association Certification Practice Test

(APA) American Payroll Association Certification Practice Test

APA Taxation and Compliance 4