ADP Tax Reporting and Filing 3

Question 1

What is backup withholding and when does it apply to payroll?

Accepted Answer

A 24% federal tax withheld when a payee fails to provide a correct TIN or the IRS notifies the payer to withhold

Answer

An additional withholding elected by the employee on Form W-4

Answer

State-mandated withholding for supplemental wages above $1 million

Answer

Withholding applied to employees who claim exempt status

Question 2

Which ADP report is used to verify that the correct amount of federal income tax was withheld across all employees for the quarter?

Accepted Answer

Payroll Tax Liability Report

Answer

Employee Earnings Summary

Answer

Benefits Deduction Summary

Answer

Labor Cost Analysis Report

Question 3

What is the purpose of IRS Form 8922 in the context of third-party sick pay?

Accepted Answer

To reconcile third-party sick pay wages and taxes that were reported under the employer's or insurer's EIN rather than the other party's EIN

Answer

To report non-taxable sick pay benefits paid by the employer

Answer

To claim a credit for employer-paid FMLA leave

Answer

To document COBRA premium subsidies

Question 4

In ADP, what triggers a new state tax registration requirement when a company expands to a new state?

Accepted Answer

Hiring an employee who works in or is a resident of a new state

Answer

Opening a bank account in a new state

Answer

Signing a commercial lease in a new state

Answer

Registering a trademark in a new state

Question 5

What is the Electronic Federal Tax Payment System (EFTPS) and how does it relate to ADP?

Accepted Answer

A U.S. Treasury system for making federal tax deposits electronically; ADP uses it to deposit taxes on behalf of clients enrolled in its tax filing service

Answer

An ADP-proprietary payment portal for all payroll tax filings

Answer

A system used only by large employers to file quarterly returns

Answer

An optional system for submitting year-end W-2 data

Question 6

What action must a payroll specialist take in ADP when an employee claims exempt from federal income tax withholding on their W-4?

Accepted Answer

Set the employee's federal withholding to exempt in ADP and note that a new W-4 must be submitted by February 15 each year to maintain exempt status

Answer

Continue withholding at the employee's prior rate until verified by HR

Answer

Automatically increase state tax withholding to compensate

Answer

Flag the employee for an IRS audit notification