CPS Payroll Fundamentals 3

Question 1

An employee claims exempt from federal income tax withholding on Form W-4. By what date must she submit a new W-4 each year to maintain exempt status?

Accepted Answer

February 15

Answer

A W-4 claiming exempt status expires on February 15 of the following year; a new form must be submitted by that date to continue the exemption.

Question 2

Which payroll tax deposit schedule applies to a new employer with no tax liability history?

Accepted Answer

Monthly depositor

Answer

The IRS classifies new employers as monthly depositors until a lookback period establishes their tax liability history.

Question 3

Under FICA, the Additional Medicare Tax of 0.9% applies to wages exceeding what threshold for a single filer?

Accepted Answer

$200,000

Answer

Employers must withhold the Additional Medicare Tax of 0.9% on wages paid to an employee in excess of $200,000 in a calendar year, regardless of filing status.

Question 4

Which method allows employers to calculate federal income tax withholding using wage bracket tables for employees who have submitted a 2020 or later W-4?

Accepted Answer

Wage bracket method

Answer

The wage bracket method uses IRS Publication 15-T tables that match pay period wages to withholding amounts based on the employee's W-4 information.

Question 5

What is the FUTA tax rate after the maximum allowable state unemployment tax credit?

Accepted Answer

0.6%

Answer

The gross FUTA rate is 6.0%, but employers in states with no outstanding federal loans receive a 5.4% credit, resulting in a net FUTA rate of 0.6%.

(CPS) Certified Payroll Specialist Practice Test

(CPS) Certified Payroll Specialist Practice Test

CPS Payroll Fundamentals 3