CPP CPP Payroll Systems & Processes 2

Question 1

Under the Consumer Credit Protection Act (CCPA), the maximum amount of disposable earnings subject to garnishment for a standard debt is:

Accepted Answer

25% of disposable earnings or the amount by which earnings exceed 30 times the federal minimum wage, whichever is less

Answer

The CCPA limits creditor garnishments to 25% of disposable earnings or the amount exceeding 30× the federal minimum wage per week, whichever is smaller.

Question 2

Child support garnishment orders take priority over other types of garnishments because:

Accepted Answer

Federal law explicitly grants child support and alimony orders priority over most other garnishments

Answer

Federal law under the CCPA specifically gives child support and alimony withholding orders priority over other creditor garnishments.

Question 3

A Section 125 cafeteria plan allows employees to:

Accepted Answer

Pay for eligible benefits with pre-tax dollars, reducing their taxable income

Answer

A Section 125 cafeteria plan lets employees choose and pay for qualifying benefits with pre-tax dollars, lowering their federal income tax, Social Security, and Medicare tax obligations.

Question 4

A traditional 401(k) employee contribution reduces which payroll taxes?

Accepted Answer

Federal income tax withholding only — Social Security and Medicare are still calculated on gross wages

Answer

Traditional 401(k) deferrals reduce federal (and usually state) income tax withholding but remain subject to Social Security and Medicare taxes.

Question 5

An IRS wage levy differs from a creditor garnishment primarily because:

Accepted Answer

A levy is a government seizure to satisfy delinquent taxes and does not require a court order

Answer

An IRS levy is a statutory government seizure requiring no court order, while a garnishment is typically a court-ordered creditor remedy.

CPP - Certified Payroll Professional Practice Test

CPP - Certified Payroll Professional Practice Test

CPP CPP Payroll Systems & Processes 2