Fundamental Payroll Certification Fundamental Payroll Certification 3 — Questions and Answers
Question 1: An employer must deposit payroll taxes using the Electronic Federal Tax Payment System (EFTPS). A monthly depositor's deposits are due by the:
- 3rd of the following month
- 10th of the following month
- 15th of the following month (Correct answer)
- Last day of the current month
Correct answer: 15th of the following month
Monthly depositors must deposit accumulated taxes by the 15th day of the month following the month in which the taxes accumulated.
Question 2: Which of the following payments is generally EXEMPT from FICA taxes?
- Tips reported by employees
- Regular wages paid to full-time employees
- Wages paid to a sole proprietor's spouse
- Workers' compensation payments (Correct answer)
Correct answer: Workers' compensation payments
Workers' compensation payments are excluded from FICA because they are not considered wages for tax purposes.
Question 3: A new employee who fails to submit a W-4 must be treated as:
- Single with zero allowances (post-2019: no adjustments) (Correct answer)
- Married filing jointly with standard deduction
- Exempt from withholding until a W-4 is received
- Single with one allowance
Correct answer: Single with zero allowances (post-2019: no adjustments)
Per IRS rules, if no valid W-4 is received, the employer withholds as if the employee is single with no adjustments.
Question 4: Which payroll concept describes the total compensation paid to an employee before any deductions are taken?
- Net pay
- Taxable wages
- Gross pay (Correct answer)
- Disposable earnings
Correct answer: Gross pay
Gross pay is the total amount earned before taxes, benefits, or any other deductions are subtracted.
Question 5: Under the Consumer Credit Protection Act (CCPA), the maximum garnishment for a regular creditor from an employee's disposable earnings per week is:
- 10% or 15% of disposable earnings
- 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is LESS (Correct answer)
- 50% of disposable earnings
- 100% of disposable earnings above the poverty line
Correct answer: 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is LESS
CCPA limits garnishment to the lesser of 25% of disposable earnings or the amount exceeding 30 times the federal minimum hourly wage.
Question 6: Which form must employers file quarterly to report federal income tax withheld and FICA taxes?
- Form 940
- Form 941 (Correct answer)
- Form W-3
- Form 1096
Correct answer: Form 941
Form 941 (Employer's Quarterly Federal Tax Return) reports wages paid, tips, federal income tax withheld, and both employer and employee FICA taxes.
Question 7: A nonresident alien employee is generally subject to an additional withholding amount added to their wages before calculating federal income tax withholding. This rule is referred to as:
- Additional Medicare Tax adjustment
- Supplemental wage withholding
- Nonresident alien withholding add-on (Correct answer)
- Backup withholding
Correct answer: Nonresident alien withholding add-on
IRS Publication 15 requires adding a specific dollar amount to nonresident alien wages before applying withholding tables, ensuring proper tax withholding.
Fundamental Payroll Certification Fundamental Payroll Certification 3
An employer must deposit payroll taxes using the Electronic Federal Tax Payment System (EFTPS).
A monthly depositor's deposits are due by the: