Module 8
A validity edit checks...
A validity edit checks to see the system is operating within acceptable ranges. For example, a validity edit would identify payments that are outside acceptable ranges to assist finding errors. Edits help identify possible errors but cannot ensure the data is correct.
A corporation deposited the $100,000.00 it owed in payroll taxes ten days after the due date. The penalty for failure to make timely deposits is:
$5,000.00 Late deposit penalties are assessed when the deposit is made after the due date. The penalty is 5% of the deposit not made on time when the deposit is made more than five days but not more than 15 days of the due date.
The Trust Fund Recovery Penalty
100% penalty can be assessed against certain officers of the organization when taxes are not withheld or are not paid to the IRS.
The FLSA requires supplemental records such as time sheets, time shedules, etc be retained for how many years?
2
The maximum penalty the IRS can assess for the understatement of taxes when fraud is not involved is....
20% of the underpayment
A company understated its payroll tax liability by $15,000.00. The IRS determined this understatement was due to negligence, not fraud. The maximum penalty, if any, the IRS could assess is:
20% of the underpayment. The maximum penalty the IRS can assess for the understatement of taxes when fraud is not involved is 20% of the underpayment. A penalty of 75% of the underpayment may be assessed when fraud is involved. The Trust Fund Recovery Penalty (100%) can be assessed against certain officers of the organization when taxes are not withheld or are not paid to the IRS.
How many years must a Form W-2 be retained?
4
Under IRS regulations, how many years must copies of an employer's tax returns be retained?
4
If the benefit and payroll systems are not integrated, what data must be retained in both systems?
401(k) eligibility Gross earnings, taxable earnings, and child support deductions are not data elements found in a benefits system. 401(k) eligibility will be used in reporting by both the payroll and human resources system.
A single-entry reversal a direct deposit must be completed within how many banking days of the settlement date to not require authorization from the employee?
5
The maximum penalty the IRS can assess for the understatement of taxes when fraud IS involved is....
75% of the underpayment
Fraudulently understating federal tax is punishable by a maximum penalty of what percent of the underpayment?
75% of the underpayment.The maximum penalty the IRS can assess for the understatement of taxes when fraud is not involved is 20% of the underpayment. A penalty of 75% of the underpayment may be assessed when fraud is involved. The Trust Fund Recovery Penalty (100%) can be assessed against certain officers of the organization when taxes are not withheld or are not paid to the IRS.
Federal income tax withheld reported on Forms W-2 must reconcile with federal income tax withheld reported on Forms:
941
What is a computer interface?
A COMPUTER INTERFACE IS THE POINT WHERE TWO DISTINCT DATA-PROCESSING ELEMENTS MEET AND PASS DATA BETWEEN THE SYSTEMS.
A retuned W-2 must be retained for how many years?
At least 4 years after the due date of the tax return (or the date he tax is actually paid, if later) for the return period to which the records relate.
De minimum exception
Available when the original returns are filed on time and corrections are filed by 8/1/17. When the de minimum exception applies, the penalty does not apply to the greater of 10 or .5% of the information returns filed.
What is batch processing?
BATCH PROCESSING IS THE CODING AND COLLECTING OF ITEMS PROCESSED INTO SIMILAR GROUPS TO ALLOW THE ITEMS TO BE INPUT INTO A PAYROLL SYSTEM IN A GROUP.
Is batch processing interactive?
Batch processing is not interactive
Copies of tax returns:
COPIES OF TAX RETURNS AND THE DATE SUPPORTING THE TAX RETURN MUST BE RETAINED FOR AT LEAST 4 YEARS AFTER THE RETURNS DUE DATE OR PAYMENT DATE WHICHEVER IS LATER.
NACHA
Defines the data to be provided when electronically transferring an employee's pay into the employee's bank account.
What is escheat?
ESCHEAT IS THE PROCESS OF TRANSFERRING ABANDONED WAGES TO THE APPROPRIATE STATE AGENCY.
Which of the following payroll issues are governed only by the states?
Escheat laws Escheat of unclaimed wages is governed by state agencies only. Overtime, garnishments, and tax levies are regulated by both federal and state laws.
Form I-9 must be retained:
FORM I-9 MUST BE RETAINED FOR THE LATER OF THREE YEARS AFTER THE DATE OF HIRE OR ONE YEAR AFTER THE DATE OF TERMINATION.
1095-C due date
February 28, 2017
What are the requirements that define which records must be retained?
Federal and state requirements
Which of the following payroll issues is governed only by state agencies?
Final pay to a terminated employee is governed by state agencies only. Exempt/nonexempt status, overtime, and child labor are regulated by both federal and state laws.
If the benefit and payroll systems are not integrated, what data must be retained in both systems?
Group-term life insurance
If the time and attendance and payroll systems are not integrated, what data must be retained in both systems?
Hours worked each workweek To ensure the correct calculation of pay the employee's hours worked each workweek must be retained in both systems. Pay rate, gross compensation, and garnishment deductions are not data elements required in the time and attendance system.
What is the IRCA?
Immigration Reform and Control Act — requires data such as date of hire be retained to determine retention period for Form I-9
W2 due date
January 31, 2017
Between Forms W-2 and Forms 941, the IRS and SSA reconcile:
Medicare tax withholding. The IRS and SSA require wages subject to federal income tax, federal income tax, social security and Medicare wages, and social security and Medicare taxes be in balance between Forms W-2 and 941.
Who governs frequency of pay?
Only state
Privacy rights are governed by:
PRIVACY RIGHTS ARE GOVERNED BY FEDERAL AND STATE LAWS, AS WELL AS COMPANY POLICY.
An employee who was terminated on March 3 has not picked up her final paycheck. Which regulations govern this situation?
State. All states determine how long the employer must hold unclaimed wages when an employee fails to pick up and cash a paycheck. No federal agency, such as the DOL, IRS, or DHS, has issued regulations defining unclaimed wages.
What is a master file?
THE MASTER FILE IS THE COLLECTION OF DATA DESCRIBING THE EMPLOYEES OF A COMPANY. GOVERNMENT AGENCIES DO NOT REQUIRE THE MASTER FILE BE KEPT IN ANY SPECIFIC FORMAT.
What is the ODFI?
THE ODFI (ORIGINATING DEPOSITORY FINANCIAL INSTITUTION) IS THE FINANCIAL INSTITUTION A COMPANY PROVIDES ITS ACH FILES.
What is the RDFI?
THE RDFI (RECEIVING DEPOSITORY FINANCIAL INSTITUTION) IS THE FINANCIAL INSTITUTION POSTING DIRECT DEPOSIT AMOUNTS INTO AN EMPLOYEE'S CHECKING OR SAVINGS ACCOUNT.
Form W-2 Box 1 must equal:
THE TOTAL OF ALL FORMS W-2 BOX 1 MUST EQUAL LINE 2 FROM ALL FORMS 941 FILED DURING THE YEAR.
Form W-2 Box 2 must equal:
THE TOTAL OF ALL FORMS W-2 BOX 2 MUST EQUAL LINE 3 FROM ALL FORMS 941 FILED DURING THE YEAR.
What is a transit routing number?
THE TRANSIT ROUTING NUMBER IS A NINE-DIGIT NUMBER USED TO IDENTIFY A FINANCIAL INSTITUTION. FOR DIRECT DEPOSIT, THE EMPLOYEE'S BANK IS THE RECEIVING DEPOSITORY FINANCIAL INSTITUTION (RDFI).
Time cards:
TIME CARDS ARE SUPPLEMENTAL RECORDS THAT MUST BE RETAINED FOR AT LEAST 2 YEARS AFTER THE LAST DATE OF ENTRY.
According to the IRS, which of the following employee records must be retained?
The Internal Revenue Code requires allowances claimed on employees' Forms W-4 be kept by the employer for at least four years after the due date of the tax return.
Hours worked each day/week:
UNDER THE FAIR LABOR STANDARDS ACT, THE RECORD OF HOURS WORKED EACH DAY/WEEK MUST BE RETAINED FOR AT LEAST 3 YEARS AFTER THE DATE OF THE LAST ENTRY.
Which of the following payroll issues are governed only by the states?
Unclaimed wages. Unclaimed wages are governed by state agencies only. Minimum wage, overtime, and the payment of wages after death are regulated by both federal and state laws.
When using batch processing data is.....
When using batch processing data is developed into similar groups, totals are developed, and the totals are compared to the data input into the system. Immediate update of the data occurs in real-time processing.