Fundamental Payroll Certification Fundamental Payroll Core Payroll Concepts 4

Question 1

Under the Consumer Credit Protection Act (CCPA), the maximum amount that can be garnished from an employee's disposable earnings for ordinary creditor garnishments is:

Accepted Answer

The lesser of 25% of disposable earnings or the amount by which earnings exceed 30 times the federal minimum wage

Answer

The CCPA limits ordinary creditor garnishments to the lesser of 25% of disposable earnings or the amount exceeding 30 times the federal minimum hourly wage.

Question 2

Section 125 Cafeteria Plans allow employees to pay for eligible benefits using:

Accepted Answer

Pre-tax dollars, reducing federal taxable income

Answer

Under IRC Section 125, cafeteria plans allow employees to choose among benefits and pay for eligible ones with pre-tax salary reductions, lowering their taxable wages.

Question 3

A Flexible Spending Account (FSA) for dependent care allows employees to contribute up to what annual limit (as of current IRS guidelines) per household?

Accepted Answer

$5,000

Answer

The IRS allows up to $5,000 per household ($2,500 if married filing separately) in pre-tax contributions to a Dependent Care FSA annually.

Question 4

Which type of garnishment has the highest priority when an employee is subject to multiple garnishments?

Accepted Answer

Child support and alimony orders

Answer

Federal law gives child support and alimony garnishments (Title III of the CCPA) the highest priority over most other types of garnishments.

Question 5

Employer-provided group-term life insurance coverage exceeding $50,000 is:

Accepted Answer

Taxable income to the employee based on IRS Table I rates

Answer

The cost of employer-provided group-term life insurance exceeding $50,000 must be included in the employee's gross income using the rates from IRS Table I.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Core Payroll Concepts 4