FPC Chapter 4.1

A company is a semiweekly depositor. Its paydays are on Tuesday. The company's payroll tax deposit is due if the liability is less than $100,000.00: A. on or before the 15th day of the following month. B. by the next business day. C. on or before the following Friday. D. on or before the following Wednesday.

C. on or before the following Friday. ***Semiweekly Depositors*** Pay Days On Deposit Due Sat, Sun, Mon, and Tues The next Fri Wed, Thurs, and Fri The next Wed

If the employer's total tax liability for the lookback period is $48,000.00, the withheld taxes must be deposited no later than: A. the next business day. B. Wednesday or Friday under the semiweekly rules. C. the 15th day of the following month. D. the due date of Form 941.

C. the 15th day of the following month. ***Monthly depositors (i.e., employers with $50,000 or less in employment tax liability during the lookback period) must deposit their accumulated tax liability for each calendar month by the 15th of the following month.***

When making a timely and accurate deposit, a company can short its payroll tax deposit by: A. no shortfalls are allowed. B. the lesser of 2% of the liability or $100.00. C. the greater of 2% of the liability or $100.00. D. the greater of 5% of the liability or $500.00.

C. the greater of 2% of the liability or $100.00. ***An employer satisfies its deposit obligation if the amount of the shortfall is no more than the greater of $100 or 2% of the entire amount due, so long as the original deposit is made timely and the shortfall is deposited by the appropriate "makeup date."***

On payday, a monthly depositor's payroll tax liability of $105,000.00 must be deposited: A. by the next business day. B. by the 15th day of the next month. C. within three business days. D. by the end of the month.

A. by the next business day. ***One-Day-Rule on Monthly Depositors If a monthly depositor accumulates at least $100,000 in tax liability on any day during a month, it not only must deposit the liability by the next day, but it also becomes a semiweekly depositor for the remainder of the current calendar year and the entire next calendar year.***

A company is a monthly depositor for 2016. On payday, the company accumulates a payroll tax liability of $101,000.00. The payroll tax deposit for this liability must be made: A. by the next business day. B. on or before the following Wednesday. C. on or before the following Friday. D. by the 15th day of the following month.

A. by the next business day. ***If an employer's accumulated employment tax liability reaches $100,000 on any day during a monthly or semiweekly deposit period, the taxes must be deposited by the close of the next business day.***

A monthly depositor becomes a semi-weekly depositor in all of the following situations EXCEPT when the: A. liability in a deposit period is $50,000.00. B. lookback period amount exceeds $50,000.00. C. lookback period amount exceeds $200,000.00. D. liability in a deposit period exceeds $100,000.00.

A. liability in a deposit period is $50,000.00.

A semiweekly depositor's shortfall make-up deposit is made: A. using EFTPS. B. with Form 941. C. with Form 944. D. using NACHA.

A. using EFTPS.

Which of the following tax liabilities can be paid with Form 941 without penalty? A. $2,450.00 B. $4,500.00 C. $25,000.00 D. $100,100.00

A. $2,450.00 ***Quarterly "De Minimis" Deposit Rule Employers with an accumulated tax liability of less than $2,500 for a quarter can deposit the next quarter's liability according to their monthly or semiweekly depositor status or pay it with their Form 941 quarterly return.***

If a monthly depositor pays 98% of its tax liability timely, when must the remaining balance be paid? A. By the due date of the quarterly return B. Within three business days C. By the end of the month D. By the first Wednesday or Friday, whichever is earlier, after the 15th day of the following month

A. By the due date of the quarterly return ***For monthly depositors, the amount of the shortfall must be deposited or remitted by the due date of the quarterly return for the quarter during which the employment tax liability was incurred. **

A company making its deposits using EFTPS elects to have the bank initiate the transactions. This method is defined as a(n): A. EFTPS Through a Financial Institution. B. EFTPS Direct. C. ETA. D. Fedwire.

A. EFTPS Through a Financial Institution.

On Friday, a company accumulates $199,000.00 in employment taxes. The company must deposit this payroll tax liability by the next: A. Monday. B. Tuesday. C. Wednesday. D. Friday.

A. Monday.

If the employer's total tax liability for the lookback period is $75,000.00, a tax liability less than $100,000 must be deposited no later than: A. Wednesday or Friday under the semiweekly rules. B. the 15th day of the following month. C. the due date of Form 941. D. the next business day.

A. Wednesday or Friday under the semiweekly rules. ***For semiweekly depositors, the shortfall must be deposited by the first Wednesday or Friday occurring on or after the 15th of the month after the month during which the original deposit was required to be made or, if earlier, by the due date of the quarterly employment tax return***

What determines the tax liability in the event of an off-cycle check? A. When the employee receives the check B. When the employee cashes the check C. The pay period the check is covering D. The check date

A. When the employee receives the check

When a company makes its tax deposits using EFTPS, all of the following methods can be used EXCEPT: A. a check. B. Fedwire. C. EFTPS Direct. D. EFTPS Through a Financial Institution.

A. a check.

The payroll tax deposit due date falls on a nonbusiness day. A monthly depositor must deposit its payroll tax liability: A. by the end of the month. B. within three business days. C. by the next business day. D. by the end of the following week

C. by the next business day. ***For all depositors, if the due date of the deposit is a Saturday, Sunday, or federal holiday, the deposit is due on the next business day.***

Who develops procedures for initiating tax deposits? A. The company's financial institution B. Employers C. SSA D. IRS

B. Employers ***

To determine if an employer is a monthly or semiweekly depositor for 2016, the lookback period is: A. January 1 - December 31, 2014. B. July 1, 2014 - June 30, 2015. C. October 1, 2014 - September 30, 2015. D. January 1 - December 31, 2015.

B. July 1, 2014 - June 30, 2015 ***a "lookback period" that generally "looks back over" a 12-month period. The lookback period is the 12-month period from July 1 of the second previous year through June 30 of the previous year.***

When must taxes be deposited that are withheld from employee bonuses paid with the regular payroll? A. With the employer's quarterly tax return B. With the company's regular tax deposit C. With the employer's annual tax return D. By the end of the month

B. With the company's regular tax deposit

A monthly depositor deposits its payroll tax liability: A. by the end of the month. B. by the 15th day of the following month. C. within three business days of the end of the month. D. by the end of the following month.

B. by the 15th day of the following month. ***Monthly depositors (i.e., employers with $50,000 or less in employment tax liability during the lookback period) must deposit their accumulated tax liability for each calendar month by the 15th of the following month.***

A semiweekly depositor's payday is Friday the 10th. The following Wednesday, the company deposits 98% of its accumulated payroll tax liability. The shortfall is due: A. on the next Wednesday or Friday after the first of the next month. B. by the first Wednesday or Friday on or after the 15th of the following month. C. on or before its next deposit due date. D. with the company's quarterly return.

B. by the first Wednesday or Friday on or after the 15th of the following month.

A semiweekly depositor's payday is Friday. If the company's tax liability for a pay period is $60,000.00, the company's payroll tax deposit is due: A. by the next business day following the payday. B. on or before the Wednesday following the payday. C. on or before the next Friday following the payday. D. by the 15th day of the following month after the payday.

B. on or before the Wednesday following the payday.

A company is a monthly depositor for 2016. On a payday, the company accumulates a payroll tax liability of $101,000.00. For the remainder of 2016 and for all of 2017, the company is required to deposit taxes: A. daily. B. semiweekly. C. semimonthly. D. monthly.

B. semiweekly.

During the lookback period, a company reported $90,000.00 in employment taxes. This year, the company must deposit its payroll taxes: A. by the next business day. B. semiweekly. C. monthly. D. with Form 941.

B. semiweekly. ***Semiweekly depositors are employers with more than $50,000 in employment tax liability during the lookback period.***

A monthly depositor's shortfall make-up deposit must be made no later than: A. the first of the month following the month the shortfall was made. B. the due date of Form 941 for the quarter. C. December 31 of the year the shortfall was made. D. January 31 of the year following the date of the shortfall.

B. the due date of Form 941 for the quarter. ***For monthly depositors, the amount of the shortfall must be deposited or remitted by the due date of the quarterly return for the quarter during which the employment tax liability was incurred. **

When a $75,000.00 tax liability in a deposit period covers multiple quarters, it requires: A. paying the liability with Form 941. B. a quarterly deposit. C. multiple deposits. D. adding the liability to the next quarter's liability.

C. multiple deposits.

When a monthly depositor's liability from a pay day exceeds $100,000.00, it must deposit taxes by the: A. next business day for all future deposits. B. 15th day of the following month. C. next business day and follow the semiweekly schedule thereafter. D. next Wednesday or Friday and follow the semiweekly schedule thereafter.

C. next business day and follow the semiweekly schedule thereafter. ***If a monthly depositor accumulates at least $100,000 in tax liability on any day during a month, it not only must deposit the liability by the next day, but it also becomes a semiweekly depositor for the remainder of the current calendar year and the entire next calendar year.***

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: A. $44,000 on Monday, April 20, and $79,000 on Wednesday, April 22. B. $79,000 on Thursday, April 16, and $44,000 on Monday, April 20. C. $123,000 on Monday, April 20. D. $123,000 on Wednesday, April 22.

C. $123,000 on Monday, April 20. ***If an employer's accumulated employment tax liability reaches $100,000 on any day during a monthly or semiweekly deposit period, the taxes must be deposited by the close of the next business day.***

Employers making quarterly deposits accumulate a payroll tax liability of less than: A. $2,500.00 for the month. B. $1,000.00 for the month. C. $2,500.00 for the current or previous quarter. D. $3,000.00 for the quarter.

C. $2,500.00 for the current or previous quarter. ***Quarterly "De Minimis" Deposit Rule Employers with an accumulated tax liability of less than $2,500 for a quarter can deposit the next quarter's liability according to their monthly or semiweekly depositor status or pay it with their Form 941 quarterly return.***

A monthly depositor's liability during the lookback period must be: A. $3,000.00 up to $50,000.00. B. $500.00 up to $3,000.00. C. $50,000.00 or less. D. more than $50,000.00.

C. $50,000.00 or less. ***If an employer's four quarterly Forms 941, Employer's Quarterly Federal Tax Return (see Tax Tables and Forms in the Online Resource Center), during the lookback period show a total federal income withholding, social security, and Medicare tax liability of $50,000 or less, the employer is a "monthly depositor" for the upcoming year.***

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 ***Semiweekly Depositors*** Pay Days On Deposit Due Sat, Sun, Mon, and Tues The next Fri Wed, Thurs, and Fri The next Wed

When an employer deposits electronically and needs to initiate the tax deposit on the due date, which method is used? A. EFTPS-Direct B. EFTPS-Through a Financial Institution C. ETA D. Form 941

C. ETA

Deposits must reach the local Federal Reserve Bank by 5:00 p.m. Eastern time when using: A. EFTPS-Direct. B. EFTPS-Through a Financial Institution. C. ETA. D. direct deposit.

C. ETA. *** To make timely ETA payments, employers must comply with their financial institution's deadline for initiating ETA payments for a particular day. The deadline for the FRB to receive payment is no later than 5 p.m. Eastern time. ***

A company is a semiweekly depositor. Its paydays are every other Tuesday. When are the company's payroll tax deposits due if they are less than $100,000.00? A. By the next business day B. On or before the following Wednesday C. On or before the following Friday D. By the 15th day of the following month

C. On or before the following Friday ***Semiweekly Depositors*** Pay Days On Deposit Due Sat, Sun, Mon, and Tues The next Fri Wed, Thurs, and Fri The next Wed

A monthly depositor's tax liability for the month is $105,000.00 after the month's last pay day. When must this liability be deposited and future deposits be made? A. The deposit must be made by the next business day, and all future deposits must be made under the daily schedule. B. This deposit and future deposits are made under the monthly schedule. C. The deposit must be made by the next business day, and future deposits for the year must be made under the semiweekly schedule. D. The deposit must be made by the next day, and future deposits are made under the monthly schedule.

C. The deposit must be made by the next business day, and future deposits for the year must be made under the semiweekly schedule.

A semiweekly depositor that has a payroll tax liability of $80,000.00 from a Thursday payroll must deposit the liability by: A. Monday. B. Tuesday. C. Wednesday. D. Friday.

C. Wednesday. ***Semiweekly Depositors*** Pay Days On Deposit Due Sat, Sun, Mon, and Tues The next Fri Wed, Thurs, and Fri The next Wed

A semiweekly depositor pays only 98% of its tax liability by the Friday due date. The unpaid balance must be deposited: A. by the next business day. B. within three business days. C. by the first Wednesday or Friday on or after the 15th day of the next month or the due date of the return, whichever is earliest. D. by the due date of its quarterly return.

C. by the first Wednesday or Friday on or after the 15th day of the next month or the due date of the return, whichever is earliest. ***For semiweekly depositors, the shortfall must be deposited by the first Wednesday or Friday occurring on or after the 15th of the month after the month during which the original deposit was required to be made or, if earlier, by the due date of the quarterly employment tax return***

When does a depositor's status change because the $50,000.00 threshold during the lookback period has been exceeded? A. Semiweekly B. Monthly C. Quarterly D. Annually

D. Annually

An employer qualifies to deposit employement taxes quarterly during the first quarter of the year. Under what deposit schedule will it deposit taxes for the remainder of the year? A. Quarterly B. Monthly C. Semiweekly D. Based on its lookback period status

D. Based on its lookback period status ***If an employer's accumulated employment tax liability reaches $100,000 on any day during a monthly or semiweekly deposit period, the taxes must be deposited by the close of the next business day.***

A company making its federal tax deposits via EFTPS has elected to have its bank initiate the transactions. This method is defined as: A. Direct Deposit. B. EFTPS-Direct. C. Electronic Tax Application. D. EFTPS-Through a Financial Institution.

D. EFTPS-Through a Financial Institution.

Which form is correctly matched with its use? A. Form 943--Quarterly tax returns of employers with accumulated payroll taxes under $500.00 B. Form 941-X--Transmittal of quarterly tax returns C. Schedule B--Backup withholding D. Form 945--Reporting backup withholding

D. Form 945--Reporting backup withholding

A semiweekly depositor that has a payroll tax liability of $50,000.00 from a Monday payroll must deposit the liability by: A. Tuesday. B. Wednesday. C. Thursday. D. Friday.

D. Friday.

On Friday, a company accumulated $199,000.00 in employment taxes. Under what deposit rule must the company deposit this payroll tax liability? A. The shortfall rule B. The annual rule C. The quarterly rule D. The one-day rule

D. The one-day rule ***If an employer's accumulated employment tax liability reaches $100,000 on any day during a monthly or semiweekly deposit period, the taxes must be deposited by the close of the next business day.***

Which of the following statements is true regarding payroll tax deposits? A. A monthly depositor must deposit tax liabilities by the last day of the following month. B. Semiweekly depositors with tax liabilities incurred on a Saturday or Sunday must deposit the liability by the following Wednesday. C. Monthly depositors with accumulated payroll taxes over $3,000.00 for a month can deposit the taxes due with their quarterly tax return. D. When the accumulated tax liability reaches $100,000.00 or more on any day within a deposit period, it must be deposited by the next business day.

D. When the accumulated tax liability reaches $100,000.00 or more on any day within a deposit period, it must be deposited by the next business day. ***If a monthly depositor accumulates at least $100,000 in tax liability on any day during a month, it not only must deposit the liability by the next day, but it also becomes a semiweekly depositor for the remainder of the current calendar year and the entire next calendar year.***

The shortfall make-up deposit must be made for a semiweekly depositor by the: A. end of the current month. B. end of the next month. C. end of the current quarter. D. first Wednesday or Friday on or after the 15th of the next month or due date of the return, whichever is earliest.

D. first Wednesday or Friday on or after the 15th of the next month or due date of the return, whichever is earliest. ***For semiweekly depositors, the shortfall must be deposited by the first Wednesday or Friday occurring on or after the 15th of the month after the month during which the original deposit was required to be made or, if earlier, by the due date of the quarterly employment tax return. ***

Monthly depositors must deposit their payroll tax liability: A. by the next business day. B. no later than the end of the month. C. within three business days of the end of the month. D. no later than the 15th day of the following month.

D. no later than the 15th day of the following month. ***Monthly depositors (i.e., employers with $50,000 or less in employment tax liability during the lookback period) must deposit their accumulated tax liability for each calendar month by the 15th of the following month.***

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: A. by the next business day. B. on or before the following Wednesday. C. on or before the following Friday. D. on or before the 15th day of the following month.

D. on or before the 15th day of the following month. ***Monthly depositors (i.e., employers with $50,000 or less in employment tax liability during the lookback period) must deposit their accumulated tax liability for each calendar month by the 15th of the following month.***

An employee receives a paycheck on Friday and realizes that overtime was not included. The employee contacts payroll, which verifies the shortage and issues the employee an off-cycle payment on Monday. The employer's tax liability on Friday was $200,000.00 and it made the deposit on Monday. The taxes from the off-cycle payment must be deposited by: A. Monday, the day the payment was issued. B. the next Tuesday. C. the next Wednesday. D. the following Friday.

D. the following Friday.