Practice Test Geeks(CPS) Certified Payroll Specialist Practice Test
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Payroll Administration & Taxation Flashcards

7 cards from real CPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Payroll Administration & Taxation flashcards as text

  1. An employee receives a $10,000 severance payment upon termination. How is this payment taxed?

    Answer: Subject to federal income tax withholding, Social Security, and Medicare taxes

    Severance pay is treated as supplemental wages and is subject to federal income tax withholding as well as FICA taxes.

  2. What is the Electronic Federal Tax Payment System (EFTPS) threshold that requires employers to use electronic deposits instead of paper coupons?

    Answer: All employers must use EFTPS; paper coupons are no longer accepted

    The IRS eliminated Form 8109 paper deposit coupons and now requires all employers to use EFTPS for federal tax deposits.

  3. Under the FLSA, what is the maximum tip credit an employer may take against the federal minimum wage in 2024?

    Answer: $5.12 per hour

    The maximum tip credit is $5.12/hour, which is the difference between the $7.25 minimum wage and the $2.13 tipped minimum direct wage.

  4. Which payroll record retention period does the IRS require for employment tax records such as Forms W-4 and payroll registers?

    Answer: At least 4 years after the tax is due or paid

    IRS regulations require employers to retain employment tax records for at least 4 years after the date the tax is due or paid, whichever is later.

  5. A semiweekly depositor has a payroll with a payday on Wednesday. By when must the payroll taxes be deposited?

    Answer: The following Friday

    For semiweekly depositors, taxes on paydays Wednesday through Friday must be deposited by the following Friday.

  6. What is the purpose of Form SS-8 filed with the IRS?

    Answer: To request an IRS determination on worker classification as employee or independent contractor

    Form SS-8 is used by either workers or businesses to request an IRS ruling on whether a worker should be classified as an employee or independent contractor.

  7. Under the Affordable Care Act employer mandate, applicable large employers (ALEs) must offer minimum essential coverage to what percentage of full-time employees?

    Answer: At least 95%

    ALEs must offer minimum essential coverage to at least 95% of their full-time employees or face potential Section 4980H(a) penalties.