Chapter 6: Employer payroll Taxes

The American Rescue Plan Act affected Form 941 because of revisions in

COVID-19 tax credits Changes to COBRA premiums

Which of the following is an employer-only tax?

California Employment Training Tax

Companies offer employee benefits to ____ after the initial hire and to remain ___ within their industry.

Companies offer employee benefits to retain employees after the initial hire and to remain competitive within their industry

What contributes to the SUTA rate deduction?

Company experience rating State unemployment rates

A company that fails to files its tax deposits, but does so 16 days late, could be charged Blank______, the company has not received any notification from the IRS:

10% for unpaid amounts

Departmental classification results in (proportional/disproportional) _____ distribution of wages across departments.

Departmental classification results in proportional distribution of wages across departments.

Due to the COVID-19 outbreak, employers were allowed to defer _____ percent of their share of Social Security taxes.

Due to the COVID-19 outbreak, employers were allowed to defer 100 percent of their share of Social Security taxes.

EFTPS is used to deposit Form ____ and Form _____ taxes.

EFTPS is used to deposit Form 941 and for 940 taxes

Which of the following do not impact employee benefits?

Employee federal withholding

Which of the following is a significant factor in determining SUTA rates?

Employee retention rate

Which of the following are employee benefits that would appear on the annual total compensation report?

Employer-paid gym memberships Company-provided awards

An employer has additional payroll tax liabilities including ___ taxes and worker's ____ insurance

An employer has additional payroll tax liabilities including unemployment taxes and worker's compensation insurance

An employer's expenses related to taxes, ___ , and ____ are an additional cost of having employees.

An employer's expenses related to taxes, insurance and benefits are an additional cost of hiring employees

FUTA and SUTA are _____ taxes in all but three states

FUTA and SUTA are employer only/ paid taxes in all but three states

The form 940 tax return is for the annual reporting of:

FUTA taxes

What are identified as statutory deductions?

Federal Income Taxes Social Security Taxes

Which professions are exempt from FUTA taxes?

Federal employees Agricultural workers

Examples of employee payroll-related liabilities include:

Federal income tax FICA taxes Garnishments Union dues

The failure to file penalty applies to amounts listed on

Form 941 Form 941, Schedule B

Select the following categories of injuries that comprise the majority of workers' compensation insurance claims.

Fractured bones Sprains and strains Inflammation

The W-2 reflects what type of wages?

Gross wages less pre-tax deduction

Which of the following would reduce gross wages as shown on Form W-2?

Health insurance Contributions to 401(k)

Employees of what profession must earn less than $1,000 to be exempt from FUTA provisions?

Household Employee

Who would determine when Form 944 should be used?

IRS notification

If a company outsources its payroll processing, it is still _____ for any late or unremitted payroll taxes.

If a company outsources its payroll processing, it is still liable for any late or unremitted payroll taxes.

How does payroll data help employers analyze payroll costs?

It facilitates the analysis of benefit offered and strategic advantage.

An electronically filed W-3, and accompanying W-2 copies, should be submitted by:

January 31

Form 940 is due by

January 31 of the subsequent year

Many companies pay between ___and ___ percent of employee health insurance premiums.

Many companies pay between 70 and 100 percent of employee health insurance premiums

Which of these states shares the cost of SUTA with the employee?

New Jersey

What causes reductions in the employer's FUTA rate?

On time SUTA deposits

When reporting payroll taxes using Schedule B, on what date should the employer place the tax liability amount?

Payroll date

Which of the following are true about worker's compensation premiums?

Premiums vary based on employee job classifications. Annual premiums are paid based on payroll estimates. They are expressed as amounts per $100 of payroll per job classification.

Which of the following are payroll tax deposit frequencies?

Quarterly Monthly Semiweekly

Boxes 10, 11, and 12 on the W-2 are used for which of the following situations:

Retirement plan contributions Dependent care benefits

Which of the following are ways an employer could minimize their SUTA tax rate?

Review employee separation documentation. Review the SUTA account regularly

Who must file the Schedule B?

Semi-weekly depositors

Which of the following is true about the employer responsibility for payroll taxes?

Social Security tax is matched by the employer up to the Social Security wage base. Employers match the 1.45% withheld for Medicare tax for all employees.

Which of the following is an employer's payroll responsibility?

Tax withholding and remittance Employee compensation tax

When an employee earns less than $7,000 during the calendar year, the employer is responsible for how much FUTA tax?

The FUTA rate applied to the employee's earnings during the portion of the calendar year worked.

The W-2 acts as supporting documentation for the _____ reported on forms 941 and 940.

The W-2 acts as supporting documentation for the total wages reported on forms 941 and 940.

Under what circumstances will the IRS waive penalties for filing, inaccuracy, and deposit issues?

The amount of the shortfall is deposited by either the due date of the period return or by the semiweekly deposit due date. The amount of the discrepancy does not exceed $100 or 2% (whichever is greater) of the required deposit

The amount the employer generally remits to the federal government for FUTA taxes is ___ percent.

The amount the employer generally remits to the federal government for FUTA taxes is .6 percent

The _____ report allows a company to measure the cost of each employee.

The benefit analysis report allows a company to measure the cost of each employee.

The FUTA rate applied to the employee's earnings during the portion of the calendar year worked.

The credit will continue to be reduced on the third and fifth year until the loan is repaid The credit taken against the 6.0% base rate may be reduced

The employer's SUTA rate is determined by a mix of state unemployment rates and ____ ratings

The employer's SUTA rate is determined by a mix of state unemployment rates and company experience ratings

The lookback period involves the employer taxes reported prior to ____ of the prior year.

The lookback period involves the employer taxes reported prior to June 30 of the prior year

The changes to Form 941 resulting from the American Rescue Plan Act were effective as of:

The second quarter of 2021.

Which of the following are not statutory deductions?

Union Dues Supplemental Insurance

State tax remittances occur on what schedule?

Varies by state

When contesting a state unemployment claim, an employer should use ___ forms

When contesting a state unemployment claim, an employer should use state issued forms

Worker's compensation is another type of ____ responsibility paid by the ___

Worker's compensation is another type of payroll responsibility paid by the employer

Benefit analysis provides employers

a chance to balance employee retention a check on the profitability of a department

The payroll accountant may perform the following duties

allocating employee expenses to departments.

When the employer has an annual payroll tax liability of less than $1,000, what is their tax deposit schedule?

annual

Social Security and Medicare taxes may

be listed separately when the employer makes the tax deposit.

Employers may use the annual compensation report for:

benefit cost analysis

Employers must understand the total cost of an employee for:

budget development productivity determination profitability

Which of the following would not be included in the annual compensation report?

charitable contributions employee paid taxes

The W-3 should be submitted with:

copy A of the W-2

What may cause the Social Security wages reported to be different than the Medicare wages?

earnings over $147,000

The annual compensation report would use information from:

employee earnings register

Which of the following would be included in the annual compensation report?

employer paid taxes employee earnings

The W-2 has two numbered copies. These are for:

filing state, city, or local tax return

The SUTA wage base

fluctuates among states

Which of the following would increase the compensation of an employee?

health insurance paid by employer 401(k) match by employer

Payroll related expenses:

impacts profitability of a department impacts business profitability assist decision making

The frequency of each company's deposits is determined during the

lookback period

A tax deposit frequency is

monthly

The 941 is a quarterly report for which type of payroll depositors?

monthly

Departmental classification provides for:

per employee allocation across departments accurate labor cost distribution

The purpose of the 941 is to:

reconcile tax deposits and liabilities

Typical pre-employment costs would include:

recruitment

The company may be charged a 15% additional penalty for failure to deposit the appropriate amount of payroll-related taxes to the IRS if it:

remitted more than 10 days after first notice

An annual compensation report:

shows total cost per employee shows cost per benefit provided identifies all benefits paid by employer

Benchmarking employee compensation compares the company's costs against:

similar companies geographic averages

The purpose of the W-3 is:

summarize total W-2 data

Labor distribution is:

the number of employees per department

Labor distribution reports would show

time worked number of employees

Typical costs of having employees include:

wages recruitment training

If an employee has earned $153,400, which boxes will report lower wages on the W-2?

Box 1 Box 3

What is the maximum tax liability for Form 944?

$1,000 annually

What is the maximum wage that Social Security taxes are withheld from during 2022?

$147,000

What is the unadjusted FUTA rate?

6%

What is the maximum earnings that an employer will pay FUTA on?

7000