CPP Basic 5

Question 1

What is the Consumer Credit Protection Act (CCPA) limit on creditor garnishments for an employee earning $600 per week in disposable earnings?

Accepted Answer

$150

Answer

For disposable earnings over $290/week, the CCPA limits creditor garnishment to 25% of disposable earnings; 25% × $600 = $150.

Question 2

Which of the following is an example of a pre-tax deduction that reduces an employee's federal taxable wages?

Accepted Answer

Traditional 401(k) contribution

Answer

Traditional 401(k) contributions are made on a pre-tax basis, reducing the employee's federal taxable wages in the current period.

Question 3

How frequently must employers deposit FUTA taxes if their accumulated liability exceeds $500?

Accepted Answer

Quarterly

Answer

FUTA deposits are required quarterly when the undeposited FUTA liability exceeds $500; otherwise, any balance is paid when Form 940 is filed.

Question 4

An employer fails to withhold and remit payroll taxes. Under IRS Trust Fund Recovery Penalty (TFRP) rules, who can be held personally liable?

Accepted Answer

Any responsible person who willfully failed to collect or pay over the taxes

Answer

The TFRP can be assessed against any 'responsible person' who willfully failed to withhold or remit trust fund taxes, regardless of title.

Question 5

What is the Medicare tax rate for wages below the Additional Medicare Tax threshold for a single filer?

Accepted Answer

1.45%

Answer

The standard Medicare (HI) employee tax rate is 1.45%; the employer also pays 1.45%, for a combined rate of 2.9%.

CPP - Certified Payroll Professional Practice Test