CPP MCQ 2 — Questions and Answers
Question 1: An employee works 46 hours in a workweek and earns a weekly salary of $920. What is the correct overtime premium pay owed under FLSA?
- $30.00
- $60.00 (Correct answer)
- $120.00
- $180.00
Correct answer: $60.00
The regular rate is $920/46 = $20/hr; the overtime premium (half-time) is $10 × 6 hours = $60.
Question 2: Which IRS form must an employer file to report FUTA tax liability?
- Form 941
- Form 944
- Form 940 (Correct answer)
- Form 945
Correct answer: Form 940
Form 940 is the Employer's Annual Federal Unemployment (FUTA) Tax Return.
Question 3: Under the FLSA, the tip credit allows tipped employees to be paid a minimum cash wage of how much per hour (federal level)?
- $2.13 (Correct answer)
- $3.00
- $4.25
- $5.12
Correct answer: $2.13
The federal minimum cash wage for tipped employees has remained at $2.13 per hour since 1991.
Question 4: When calculating the Social Security wage base for 2024, wages above what threshold are exempt from the 6.2% employee Social Security tax?
- $147,000
- $160,200
- $168,600 (Correct answer)
- $176,100
Correct answer: $168,600
The 2024 Social Security wage base is $168,600; wages above this amount are not subject to the 6.2% Social Security tax.
Question 5: Which method allows an employer to spread a lump-sum supplemental wage payment over the year for federal income tax withholding purposes?
- Flat rate method
- Aggregate method (Correct answer)
- Annualized method
- Gross-up method
Correct answer: Aggregate method
The aggregate method combines the supplemental payment with regular wages and applies the withholding tables to the total.
Question 6: An employer discovers a payroll error that resulted in an employee being overpaid $500 in a prior year. What is the correct tax treatment?
- Deduct the $500 from the employee's current paycheck pre-tax
- Issue a corrected W-2c for the prior year (Correct answer)
- Report the repayment as miscellaneous income in the current year
- No action is required if under $600
Correct answer: Issue a corrected W-2c for the prior year
A prior-year overpayment requires a corrected Form W-2c to adjust the employee's taxable wages and tax withholding for the year of the error.
Question 7: Which of the following fringe benefits is excluded from an employee's gross income under IRC Section 132?
- Personal use of a company vehicle
- Moving expense reimbursements
- No-additional-cost services (Correct answer)
- Cash bonuses
Correct answer: No-additional-cost services
No-additional-cost services (e.g., free standby flights for airline employees) are excludable under IRC Section 132(b).
CPP MCQ 2
An employee works 46 hours in a workweek and earns a weekly salary of $920.
What is the correct overtime premium pay owed under FLSA?