CPP Certified Payroll Professional 5

Question 1

Which of the following correctly describes a 'constructive receipt' of wages?

Accepted Answer

Wages are taxable when made available to the employee without restriction, even if not yet received

Answer

Under the doctrine of constructive receipt, income is taxable when it is credited to an employee's account or made available without substantial restrictions.

Question 2

An employer provides a company car for both business and personal use. How should the personal use portion be treated for payroll purposes?

Accepted Answer

It is imputed as taxable income subject to federal income tax and FICA

Answer

The fair market value of personal use of a company vehicle is imputed income — it is added to taxable wages and subject to both federal income tax withholding and FICA.

Question 3

What is a Household Employer's threshold for FICA tax obligations in 2024?

Accepted Answer

$2,700 in cash wages paid to any household employee during the year

Answer

For 2024, household employers must withhold and pay FICA taxes if they pay any single household employee $2,700 or more in cash wages during the calendar year.

Question 4

Under the FLSA, which test is primarily used to determine if an individual is an employee or an independent contractor?

Accepted Answer

The economic reality test

Answer

The FLSA uses the 'economic reality test,' which examines whether the worker is economically dependent on the employer or is truly in business for themselves.

Question 5

If a semiweekly depositor accumulates a tax liability of $100,000 or more on any day, when must the deposit be made?

Accepted Answer

By the next business day

Answer

The next-day deposit rule requires that if a deposit obligation reaches $100,000 on any day, the deposit must be made by the next banking day.

CPP - Certified Payroll Professional Practice Test

CPP - Certified Payroll Professional Practice Test

CPP Certified Payroll Professional 5