Payroll Fundamentals 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 Fundamentals flashcards as text
An employer issues a corrected W-2 to fix an error. What form is used to make this correction?
Answer: Form W-2c
Form W-2c (Corrected Wage and Tax Statement) is used by employers to correct errors previously reported on Form W-2.
Under the FLSA, what is the minimum age for a minor to work in a non-agricultural job without any hour restrictions?
Answer: 16
Minors aged 16 and 17 may work unlimited hours in non-hazardous, non-agricultural occupations under FLSA child labor provisions.
What is the IRS de minimis fringe benefit rule primarily used to exclude from taxable income?
Answer: Benefits so small in value that accounting for them is unreasonable or impractical
De minimis fringe benefits are those of such minimal value (e.g., occasional coffee, low-value holiday gifts) that accounting for them is impractical.
Which of the following correctly describes an accountable plan for employee expense reimbursements?
Answer: A plan requiring business purpose, adequate accounting, and return of excess within a reasonable time
An accountable plan must meet three IRS requirements: business connection, adequate substantiation, and return of excess reimbursements, keeping payments non-taxable.
What is the penalty for intentional disregard of the requirement to file correct information returns (e.g., W-2s)?
Answer: $630 per return or 10% of the amount required to be reported, whichever is greater
For intentional disregard, the IRS penalty is the greater of $630 per return or 10% of the total amount required to be reported, with no maximum cap.
An employee has a child support garnishment order and a creditor garnishment order. Which has priority?
Answer: The child support order, regardless of when it was received
Federal law (Title III of the Consumer Credit Protection Act) gives child support and alimony orders priority over other garnishments.
What is the primary purpose of the Social Security Administration's (SSA) wage reconciliation process?
Answer: To confirm employee wages are properly posted to their Social Security earnings record
The SSA reconciles W-2 data submitted by employers to ensure employees' wages are accurately credited to their Social Security earnings records, which affects future benefits.