APA Payroll Certification
In 2021, an employer had four employees. Two of the employees worked full-time and earned $42,000 each. The other two worked part-time and earned $5,590 and $3,275, respectively. The company is not eligible to receive any FUTA tax credits. The employer's FUTA tax liability is:
$1,371.90
Effective January 1, 2021, federal contractors are subject to an Executive Order requiring employees working under the federal contract to be paid a minimum wage of __________.
$10.95 per hour
On Wednesday, April 15, a semiweekly depositor paid wages and incurred an employment tax liability of $79,000. On Friday, April 17, it paid commissions incurring a tax liability of $44,000. The employer must deposit:
$123,000 on Monday, April 20.
Under the FLSA, employers may pay tipped employees, who receive $30.00 in tips during a month, at least __________ as long as the amount of the employee' tips is enough to raise the employee's regular rate of pay to the minimum wage for the workweek.
$2.13 per hour
An employee's biweekly disposable earnings are $900.00. Under the CCPA, calculate the maximum creditor garnishment deduction.
$225.00
What is the 2021 annual compensation limit for defined benefit and contribution plans?
$290,000
The opportunity wage for teenagers for newly hired employees who are under the age of 20. They may be paid this rate for the first 90 consecutive calendar days after they are hired.
$4.25 per hour
Tip credit
$5.12 per hour
Under the FLSA, the minimum weekly salary an exempt executive can be paid is:
$684.00 weekly.
The FUTA tax wage base is:
$7,000.00
The federal minimum wage since July 24, 2009
$7.25 per hour
An employee earns $2,146.27 semimonthly, claims single, 1 dependent on their returned Part 3 of Form 668-W. The IRS exempts $702.09 each pay period for a federal levy. The employee's combined withholding for federal income, social security, and Medicare taxes is $636.37. The employee has no other deductions. The employee owes $1,200.00 in back taxes. What is the maximum deduction for the federal levy each pay period?
$807.81
The Fair Labor Standards Act (FLSA) does NOT
1. Require employers to provide paid vacations, sick days, jury duty leave, holidays, lunch breaks, or coffee breaks, but some states require certain employers to provide paid sick leave to employees meeting specific requirements 2. Regulate how often employees must be paid or when they must be paid after employment termination (voluntary or involuntary) 3. Restrict the hours employees over 16 years of age may be required to work
Fair Labor Standards Act (FLSA)
1. Sets the minimum wage and overtime rates covered employees must receive for their work 2. Requires record keeping by all covered employees 3. Places restrictions on the types of work minors can do and the hours they can work 4. Mandates equal pay for equal work
What is an employer's Medicare tax rate when an employee has year-to-date Medicare wages in excess of $200,000.00?
1.45%
A nonexempt employee is provided room and board. Under the FLSA, the employee's regular rate of pay calculation includes:
100% of the fair-market value of the room and board.
Under the FLSA, what is generally the minimum age at which a minor can be employed?
14
An employee has year-to-date wages of $151,800.00 and year-to-date supplemental wages of $25,000.00 with no state or local withholding taxes. What percentage is used to calculate the net amount of a grossed up bonus?
76.55%. When an employee receives a net amount, the calculation of taxable wages requires using the gross-up formula. When grossing-up an employee's net wages, divide the desired net pay by 100% less all of the employee's tax rate percentages.
A hospital employee working under the 8/80 provision works 5 days, 8 hours a day in the first week and 4 days at 10 hours a day in the second week. Calculate the overtime hours, if any, the employee must be paid.
8 A hospital employee working under the 8/80 provision must be paid overtime for working hours over 8 in a day or 80 in the 14 day period. Even though the employee has worked 80 hours in the two week period, 8 hours of overtime is due for the four days when the employee worked more than 8 hours a day.
Under the FLSA, an employee under the age of 20 can be paid the opportunity wage for a maximum of
90 calendar days
A company is required to withhold taxes from an independent contractor when:
A TIN is not provided
Which of the following workers is classified as an employee?
A day-care worker guaranteed a minimum salary plus a percentage of the profits
Form 941-X is filed:
Alone when claiming a refund or owing additional taxes.
Shift differential (shift premium)
An amount added to an hourly rate to compensate an employee for working an evening, a late night, or other undesirable shift. The FLSA does not require this to be paid.
Exempt Employee
An employee who is paid a salary and who does not receive overtime pay. These employees are not protected by the FLSA.
Nonexempt Employee
An employee who is paid at least the minimum wage for all hours worked. An overtime premium for hours worked over 40 in a single workweek must also be paid to these employees.
Workweek
Any consecutive seven-day period.
Under the FLSA, a workweek starts on:
Any day at any time.
Discretionary bonus
Bonuses paid for services performed.
The social security tax reported on Form 941 represents what taxes?
Both employee's and employer's share of social security
Which box on the 2021 Form W-2 is correctly matched with its use?
Box 12 (Code J)--Nontaxable sick pay
How, if at all, is Form 940 corrected?
By filing an amended Form 940
Engaged to be Waiting
Compensable work time because it is usually short, spent on the employer's premises, and insufficient for the employee to use for his or her own purposes.
Nondiscretionary bonus
Contractual or agreed-upon bonuses or incentives related to productive, efficiency, attendance, quality, or some other measure of performance.
An example of an amount included in the calculation of an employee's regular rate of pay.
Cost-of-living adjustments. The FLSA defines regular rate of pay as the total regular pay for all hours work divided by the hours worked in the workweek. The FLSA exempts the following types of pay from the regular rate of pay - gifts, paid time off, reimbursed expenses, discretionary bonuses, benefit plan contributions, and others.
Form SS-8
Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Contains a series of questions categorized into behavioral control, financial control, and relationship of the parties designed to determine the extent of the employer's right to control the result of the assigned work and the methods used to perform that work (employee or independent contractor).
A company making its federal tax deposits via EFTPS has elected to have its bank initiate the transactions. This method is defined as:
EFTPS-Through a Financial Institution.
How is a company with 538 employees required to file Forms W-2?
Electronically
Reasonable Basis Test (Safe Harbor Rules)
Employers may treat workers who would be employers under the common law test as independent contractors, exempt from federal employment tax laws, if they have a reasonable basis for doing so.
(T/F) Employers must report newly hired employees within 10 calendar days of the date of hire.
False. Must be within 20 calendar days of hire.
(T/F) The information an employee provides in Step 4(a) of Form W-4 is only used if the employer is using the Wage Bracket method, Worksheet 2 from Publication 15-T.
False. The amounts listed in Step 4(a) of an employee's Form W-4 is used in both the Percentage method and the Wage Bracket method for calculating federal income taxes.
When calculating a gross-up for an employee working in a state with no income tax and YTD wages of $50,000.00, the employee's desired net payment of $5,000.00 is divided by 100% less the:
Federal income, social security and Medicare tax percentages only.
Family and Medical Leave Act (FMLA)
Guarantees employees unpaid leave for the birth or adoption of children and for serious medical conditions of family members or themselves.
If an employee's spouse dies, the employee must submit an amended Form W-4 by:
January 1 of the following year.
Which of the following plans can discriminate in favor of highly compensated employees?
Nonqualified deferred compensation plans (457(b) plans)
On Form 941, Schedule B, deposits are:
Not reported.
Form 668-W
Notice of Levy on Wages, Salary, and Other Income
A company is a monthly depositor. Its paydays are on Wednesdays. If the payroll tax liability for the month is less than $100,000.00, the company's payroll tax deposit is due:
On or before the 15th day of the following month.
Under the FLSA for a Sunday to Saturday workweek, in which of the following situations must a nonexempt employee be paid an overtime premium?
Over the last two weeks, a hospital employee under an 8/80 agreement worked 70 hours which included one 10-hour shift.
Form 2159
Payroll Deduction Agreement
Form 668-D
Release of Levy/Release of Property from Levy
When managing employees' Forms W-4 the employer should
Remind employees by December 1 to submit new Forms W-4 if their anticipated filing status or income tax liability has changed. IRS regulations state an employer should remind employees by December 1 to submit new Forms W-4 if their anticipated filing status or federal income tax liability has changed.
Form W-9
Request for Taxpayer Identification Number and Certification. Used by nonemployees to provide a taxpayer identification number to the company for which the nonemployee has received a reportable payment. This form also tells the company whether the nonemployee is subject to backup withholding.
Under the FLSA, an employee is engaged to be waiting when the employer:
Restricts the employee's behavior and does not permit personal business.
During the lookback period, a company reported $90,000.00 in employment taxes. This year, how must the company deposit its payroll taxes?
Semiweekly
Which employers must use Form 941, Schedule B?
Semiweekly depositors
Form 941 is used to report:
Social security wages.
A monthly depositor's shortfall make-up deposit must be made no later than:
The due date of Form 941 for the quarter.
Employee
The employer has the right to control what work will be done and how that work will be done.
8/80 Rule for Hospitals and Nursing Homes
The employer must pay employees covered by the agreement or understanding at least 1 1/2 times their regular rate of pay for all hours worked over eight in a day or 80 in the 14-day period, whichever would result in a higher pay for the employee.
When making a timely and accurate deposit, a company can short its payroll tax deposit by:
The greater of 2% of the liability or $100.00.
Independent Contractor
The only control of the company is the desired results to be accomplished, and not the details by which those results are accomplished.
Common Law Test
The primary way to determine whether an individual qualifies as an employee or an independent contractor.
Imputed Income
The taxable value of noncash benefits the employee receives such as taxable group-term life insurance. Imputing income reduces an employee's net pay by increasing taxes. The employee does not receive additional pay in the form of cash.
(T/F) 401(k) plan deferrals are not subject to federal income tax when deferred.
True
(T/F) A 24% backup withholding tax on nonwage payments is withheld if a payee has failed to provide a Taxpayer Identification Number (TIN) or the IRS has notified the payer that the TIN is incorrect.
True
(T/F) A rehired employee must be reported when the individual has been separated from employment with the organization for at least 60 consecutive days.
True
(T/F) Employers are NOT responsible for validating the information on Form W-4 or for providing advice relating to Form W-4. An employee's Form W-4 remains valid until the employee amends the form or an exempt Form W-4 expires.
True
(T/F) Employers reporting more than $50,000.00 in payroll taxes during the lookback period are semiweekly depositors.
True
(T/F) If an employee submits a Form W-4 indicating the desire to have a flat dollar amount of tax withheld, the Form W-4 is not valid and MUST be rejected.
True
(T/F) If an employer is covered by both state and federal law and the two are not the same, the employer is required to pay the higher minimum wage based on the state in which the employee works.
True
(T/F) The FLSA regulates overtime requirements, minimum wage, child labor, and equal pay rules
True
(T/F) Under the FLSA, the an administrative exempt employee's primary duties must be the performance of office or nonmanual work directly related to the company's management or business operations with the duties requiring the exercise of discretion and independent judgement in matters of significance. Administrative employees not meeting the administrative exemption must be paid overtime for all hours worked over 40 in a workweek.
True
A semiweekly depositor's shortfall make-up deposit is made:
Using EFTPS.
A semiweekly depositor that has a payroll tax liability of $80,000.00 from a Thursday payroll must deposit the liability by:
Wednesday
An employee must complete a new Form W-4:
When the employee's filing status changes from married filing jointly to single or married filing separately.
An employee's profit sharing bonus is payable in the year following the employee's death. How should the employer tax and report the bonus?
Withhold no taxes and report the bonus amount on Form 1099-MISC, Box 3.
Under the FLSA, when determining whether a nonexempt employee is to be paid overtime, the employer uses the hours worked in a:
Workweek
Which of the following workers is classified as an employee? a. A clerk working evenings until the company can find a replacement b. A lecturer paid a percentage of the money collected at fund raisers c. A commercial artist furnishing her own tools and equipment d. A lawyer retained on a project-by-project basis
a. A clerk working evenings until the company can find a replacement
All of the following provisions are a part of the Fair Labor Standards Act EXCEPT: a. eligibility for employment in the U.S. b. classification of exempt or nonexempt employees. c. minimum wage. d. overtime provisions.
a. eligibility for employment in the U.S.
All of the following types of compensation are included in the calculation of a nonexempt employee's regular rate of pay EXCEPT: a. stock appreciation rights. b. room and board. c. nondiscretionary bonuses. d. retroactive pay.
a. stock appreciation rights.
Which of the following amounts is used when calculating an employee's gross-up? a. Taxable income b. Desired net pay c. Gross income d. Disposable income
b. Desired net pay
All of the following life events would necessitate a new Form W-4 be filed within 10 days EXCEPT: a. no longer eligible to claim exempt. b. death of a spouse. c. a nonworking spouse takes a job. d. a legal separation.
b. death of a spouse.
All of the following items are covered by the Fair Labor Standards Act EXCEPT: a. defining equal pay for equal work. b. defining when escheat laws apply. c. setting child labor restrictions. d. setting the minimum age for work.
b. defining when escheat laws apply.
A change in the company workweek may be necessary to: a. reduce paying overtime. b. meet changing business needs. c. comply with the calendar week. d. adjust pay schedules during holidays.
b. meet changing business needs.
On Tuesday, a semiweekly depositor incurs a payroll tax liability of $80,000.00; on Wednesday, another payroll tax liability of $25,000.00 is incurred. What deposit(s) must be made? a. $105,000.00 on Thursday b. $105,000.00 on the following Wednesday c. $80,000.00 on the next Friday and $25,000 on the next Wednesday d. $105,000.00 on the next Friday
c. $80,000.00 on the next Friday and $25,000 on the next Wednesday
Under the FLSA, as of January 1, 2021, which of the following situations satisfies federal minimum wage requirements? a. An employee signs a contract agreeing to work for less than the minimum wage if the employer provides him with time off to attend college classes b. A part-time employee in shipping paid $6.75 per hour c. An employee, age 18, is paid $106.25 for working 25 hours during the first week on the job d. An employer covered under the FLSA pays a state minimum wage that is lower than the federal minimum wage
c. An employee, age 18, is paid $106.25 for working 25 hours during the first week on the job
An employee was hired in April 2021 and filed an exempt Form W-4. The employee's Form W-4 expires on: a. December 1, 2021. b. December 31, 2021. c. February 15, 2022. d. April 15, 2022.
c. February 15, 2022.
Which form is correctly matched with its use? a. Form 941--Estimated quarterly tax return b. Form 941-X--Transmittal of quarterly tax returns c. Form 945--Reporting backup withholding d. Schedule B--Backup withholding
c. Form 945--Reporting backup withholding
What is the definition of imputed income? a. Taxes withheld from the employee based on the benefits received b. Amount recorded in the general ledger system c. Taxable value of noncash benefits the employee receives d. Cash the employee is paid through the payroll system
c. Taxable value of noncash benefits the employee receives
An employee who is a full-time student is claimed as a dependent by her parents. What conditions must exist for the employee to claim exempt on Form W-4? a. Only unearned income is less than $250.00. b. Only total income is less than $900.00. c. Total income is not more than $1,100.00 including unearned income of not less than $350.00. d. There are no limits for students to claim exempt.
c. Total income is not more than $1,100.00 including unearned income of not less than $350.00.
Which of the following workers is classified as an exempt employee? a. A purchasing assistant performing clerical functions b. A payroll technician inputting timecards c. A trainee soliciting orders for the company's products d. A department manager supervising five full-time employees
d. A department manager supervising five full-time employees
An employee provides a new Form W-4 on August 15. The employer must retain the prior Form W-4 until a. January 1 of the following year. b. April 15 of the following year. c. four years after the new form was filed. d. four years after the last tax return was filed using the information on the Form W-4.
d. four years after the last tax return was filed using the information on the Form W-4. Submit
All of the following retirement plans are subject to contribution limits EXCEPT: a. 457(b) plans. b. 403(b) plans. c. 401(k) plans. d. nonqualified deferred compensation plans
d. nonqualified deferred compensation plans
All of the following factors are used in calculating an employee's federal income tax withholding EXCEPT: a. filing status. b. Form W-4. c. pay frequency. d. regular rate of pay.
d. regular rate of pay.
An employer's responsibilities with Form W-4 include:
ensuring that Form W-4 is complete. Employers are responsible for ensuring that an employee has at least completed steps 1 and 5 of Form W-4.
These items are excluded from regular rate of pay
gifts, reimbursed expenses, pto, stock options, discretionary bonuses, and ot premiums in excess of premiums required by FLSA
Waiting to be Engaged
is NOT work time because the employee is freed from all duties and responsibilities for a definite period of time and has enough time to pursue personal business before returning to work even if the employee remains on the employer's premises, the waiting time in not work time.
A monthly depositor becomes a semi-weekly depositor in all of the following situations EXCEPT when the:
liability in a deposit period is $50,000.00.
Regular rate of pay
total regular pay divided by total number of hours worked