Fundamental Payroll Certification Fundamental Payroll Certification MCQ 5

Question 1

An employer fails to deposit payroll taxes on time. The deposit is 6 days late. What is the IRS penalty rate?

Accepted Answer

5%

Answer

IRS late deposit penalties are 2% (1–5 days late), 5% (6–15 days late), 10% (over 15 days), and 15% if not paid within 10 days of an IRS notice.

Question 2

Which withholding method allows an employer to calculate federal income tax withholding based on an employee's annualized wages?

Accepted Answer

Annualized wage withholding method

Answer

The annualized wage withholding method converts a period's wages to an annual figure, calculates the annual tax, then divides the result by the number of pay periods.

Question 3

What is the Additional Medicare Tax rate imposed on wages exceeding $200,000 (single filer) under the Affordable Care Act?

Accepted Answer

0.9%

Answer

An additional 0.9% Medicare tax applies to wages over $200,000 for single filers ($250,000 for married filing jointly); employers must withhold this on wages over $200,000 per employee.

Question 4

A newly hired employee fails to submit a Form W-4. What withholding status must the employer apply?

Accepted Answer

Single with zero adjustments (Single, standard withholding)

Answer

If no valid W-4 is submitted, the IRS requires employers to withhold at the default rate: Single filing status with no adjustments.

Question 5

Under ERISA, a 401(k) plan must provide participants with a Summary Plan Description (SPD) within how many days of becoming eligible?

Accepted Answer

90 days

Answer

ERISA requires that participants receive an SPD within 90 days after becoming covered by the plan, or within 120 days after the plan is established.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Certification MCQ 5