CPP Payroll Tax Compliance 3

Question 1

A new employee fails to submit a Form W-4. What withholding status must the employer use?

Accepted Answer

Single with no adjustments (highest withholding)

Answer

Per IRS rules, if an employee does not submit a W-4, the employer must withhold at the single rate with no adjustments.

Question 2

Which of the following correctly describes the trust fund recovery penalty (TFRP)?

Accepted Answer

It holds responsible persons personally liable for unpaid employee withholding taxes

Answer

The TFRP allows the IRS to hold any 'responsible person' personally liable for 100% of unpaid trust fund taxes (withheld income and employee FICA).

Question 3

State unemployment insurance (SUTA) taxes are generally paid by:

Accepted Answer

Employers only

Answer

In most states, SUTA is an employer-only tax; employees are not assessed state unemployment insurance contributions.

Question 4

What is the IRS de minimis rule as it applies to supplemental wage withholding?

Accepted Answer

Employers who paid less than $1 million in supplemental wages in the prior year withhold at 22%

Answer

The flat supplemental wage withholding rate of 22% applies when the employer paid the employee less than $1 million in supplemental wages during the calendar year.

Question 5

Which form does an employer use to make federal tax deposits electronically through the Electronic Federal Tax Payment System (EFTPS)?

Accepted Answer

No paper form — payments are made electronically via EFTPS

Answer

Since 2011, all federal tax deposits must be made electronically through EFTPS; paper Federal Tax Deposit coupons (Form 8109) are no longer accepted.

CPP - Certified Payroll Professional Practice Test

CPP - Certified Payroll Professional Practice Test

CPP Payroll Tax Compliance 3