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CPP Advanced Practice Flashcards

7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 CPP Advanced Practice flashcards as text

  1. An employee receives a $5,000 signing bonus that must be repaid if they leave within 12 months. How should this bonus be treated for payroll tax purposes when paid?

    Answer: Subject to FICA and federal income tax withholding when paid

    Signing bonuses are taxable wages subject to FICA and federal income tax withholding in the pay period they are paid, regardless of repayment conditions.

  2. Which method must employers use to deposit federal payroll taxes if their total tax liability exceeded $50,000 in the prior lookback period?

    Answer: Semi-weekly deposit schedule

    Employers with more than $50,000 in tax liability during the lookback period are classified as semi-weekly depositors.

  3. Under the FLSA, what is the maximum tip credit an employer may claim against the federal minimum wage for tipped employees?

    Answer: $2.13 per hour

    The federal maximum tip credit is $2.13 per hour, meaning tipped employees must receive at least $2.13 in direct wages.

  4. A nonresident alien employee on an F-1 visa has been in the US for 4 years. Which FICA treatment applies?

    Answer: Subject to both Social Security and Medicare taxes

    F-1 visa holders are exempt from FICA only during their first 5 calendar years; after that period they become subject to both taxes.

  5. An employer pays an employee's $1,200 personal cell phone bill as a taxable fringe benefit. What is the proper payroll treatment?

    Answer: Include in wages and withhold both FIT and FICA

    Employer-paid personal cell phone expenses that are not for business use are taxable wages subject to FIT withholding and FICA taxes.

  6. Under IRC §409A, when must a nonqualified deferred compensation plan distribute benefits to a 'specified employee' following separation from service?

    Answer: No earlier than 6 months after separation

    IRC §409A requires a mandatory 6-month delay for distributions to specified employees (key employees of publicly traded companies) after separation from service.

  7. What is the IRS-approved method for withholding federal income tax on a $2,500 supplemental wage payment when the employee's regular wages are paid separately?

    Answer: Apply the 22% flat rate withholding

    Supplemental wages paid separately from regular wages may be withheld at the optional flat rate of 22% (for amounts under $1 million).