Fundamental Payroll Certification Fundamental Payroll Payroll Reporting and Compliance 5

Question 1

What is the primary purpose of Form 944 (Employer's Annual Federal Tax Return)?

Accepted Answer

To allow very small employers to file and pay employment taxes once per year instead of quarterly

Answer

Form 944 allows small employers with annual employment tax liability of $1,000 or less to file and pay once a year rather than quarterly.

Question 2

Which of the following payments is exempt from FUTA tax?

Accepted Answer

Wages paid to a spouse employed in the business

Answer

Wages paid by an individual to their spouse are exempt from FUTA tax under IRC Section 3306(c)(5).

Question 3

Under the Consumer Credit Protection Act (CCPA), what is the maximum amount that may be garnished from an employee's disposable earnings for ordinary debt (not child support)?

Accepted Answer

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

Answer

For ordinary debt, the CCPA limits garnishment to the lesser of 25% of disposable earnings or the amount exceeding 30 times the federal minimum wage per week.

Question 4

Which of the following best describes the 'trust fund' portion of payroll taxes?

Accepted Answer

Employee federal income tax withheld and the employee share of FICA taxes

Answer

Trust fund taxes are amounts withheld from employee wages — federal income tax and the employee share of Social Security and Medicare — which the employer holds in trust for the government.

Question 5

When must an employer provide Form W-2 to employees?

Accepted Answer

By January 31 of the following year

Answer

Employers must furnish Form W-2 to employees by January 31 of the year following the tax year in which wages were paid.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Payroll Reporting and Compliance 5