OCPS Payroll Processing & Tax Compliance 3 — Questions and Answers
Question 1: Which form must a new employee complete so the employer can determine the correct federal income tax withholding?
- W-4 (Correct answer)
- W-2
- I-9
- SS-4
Correct answer: W-4
Form W-4 (Employee's Withholding Certificate) tells the employer how much federal income tax to withhold from each paycheck.
Question 2: An employee earns $3,000 gross pay this period. The current OASDI rate is 6.2% and Medicare rate is 1.45%. What is the total employee FICA withholding?
- $229.50 (Correct answer)
- $186.00
- $43.50
- $459.00
Correct answer: $229.50
FICA = (6.2% + 1.45%) × $3,000 = 7.65% × $3,000 = $229.50.
Question 3: The Additional Medicare Tax of 0.9% applies to wages that exceed which threshold for a single filer?
- $200,000 (Correct answer)
- $250,000
- $125,000
- $300,000
Correct answer: $200,000
Employers must withhold the 0.9% Additional Medicare Tax on wages exceeding $200,000 paid to any individual employee in a calendar year.
Question 4: Which IRS form is filed quarterly to report wages paid and federal employment taxes withheld?
- Form 941 (Correct answer)
- Form 944
- Form 940
- Form W-3
Correct answer: Form 941
Form 941 (Employer's Quarterly Federal Tax Return) is filed four times a year to report payroll taxes.
Question 5: Which type of pay is generally exempt from FICA taxes?
- Certain employer contributions to qualified retirement plans (Correct answer)
- Regular wages
- Overtime pay
- Bonuses
Correct answer: Certain employer contributions to qualified retirement plans
Employer contributions to qualified plans such as 401(k) are excluded from FICA taxation, unlike wages, overtime, and most bonuses.
Question 6: What penalty percentage applies when an employer fails to deposit payroll taxes 1–5 days late under the Federal Tax Deposit rules?
- 2% (Correct answer)
- 5%
- 10%
- 15%
Correct answer: 2%
A 2% penalty applies to deposits made 1–5 days late; the penalty increases with additional delay.
Question 7: Garnishments for child support orders are subject to limits under which federal law?
- Consumer Credit Protection Act (CCPA) (Correct answer)
- Fair Labor Standards Act (FLSA)
- Employee Retirement Income Security Act (ERISA)
- Family and Medical Leave Act (FMLA)
Correct answer: Consumer Credit Protection Act (CCPA)
The CCPA limits the amount of disposable earnings that can be garnished and prohibits discharge for a single garnishment.
OCPS Payroll Processing & Tax Compliance 3
Which form must a new employee complete so the employer can determine the correct federal income tax withholding?