A
For 2022, what is the social security tax wage base?
$147,000
List 4 types of supplemental wage payments.
Reported tips
• Overtime pay
• Bonuses
• Back pay
• Commissions
• Payments made under reimbursement or other expense allowance arrangements that are made under a
nonaccountable plan
• Nonqualified deferred compensation payments included in wages
• Noncash fringe benefits
• Sick pay paid by a third party as an agent of the employer
• Amounts includible in gross income under IRC §409A
• Income recognized on the exercise of a nonstatutory stock option
• Wages imputed for health coverage of someone who is not a spouse, dependent, or adult child under
age 27 of an employee
• Wages recognized
What is a Form W‑4?
Employee’s Withholding Certificate
Which of the following forms must be completed to obtain a social security number?
Form SS‑5
Which form is completed by recipients of periodic pension and annuity payments to determine the
amount of federal income tax to withhold?
Form W‑4P
Why is the date of actual or constructive payment of wages important?
The date of actual or constructive payment is important because it determines when wages are taxed and reported and at what rates.
For 2022, how much can employees receive in advance EIC payments?
Employees cannot receive advance EIC payments in 2022.
The SSA doe snot issue SSN's beginning with what number?
9
What is the name of the federal law that required the IRS to make significant changes to 2020 and
later Forms W‑4?
Tax Cuts and Jobs Act
When must a newly hired employee’s Form W‑4
be put into effect?
A Form W‑4
submitted by a newly hired employee must be put into effect by the employer for the first
wage payment after the form is submitted.
What conditions must be satisfied for an employee to claim exempt from withholding?
In order to be exempt from withholding, the employee must certify that all of the following are true:
• The employee had a right to a refund of all federal income tax withheld in the prior year because the
employee had no tax liability.
• The employee expects to have no tax liability in the current year.
• The employee cannot be claimed as a dependent on someone else’s income tax return if the employee
will have more than $1,100 in income (including at least $350 in nonwage income) in 2022.
Explain the principle of constructive payment.
Constructive payment indicates the point in time when an employee has the ability to control the payments
for services from an employer.
What is backup withholding %?
24%
How long must the employer keep an employee’s Form W‑4 on file?
Employers must retain each employee’s Form W‑4
for at least four years after the date the last tax return
was due using information from the form, which is April 15 of the following year (e.g., if an employee files
an amended W‑4
in 2022, the previous W‑4
must be retained until at least April 15, 2027).
What does a Form W‑4 tell the employer?
Form W‑4
tells the employer the employee’s anticipated tax return filing status, what adjustments to the
employee’s taxable wages the employee is making, and what tax credits the employee is claiming so that
the proper amount of federal income tax is withheld. Form W‑4
also notifies the employer whether the
employee is claiming exempt from withholding and whether the employee is a nonresident alien. In addition,
it may indicate that the employee wants an additional amount of tax withheld beyond the amount
that is calculated by the employer.
Then should you give advice to an employee about there taxes?
Don't give advice to employees
What method of federal income tax withholding must be used if the employee claims exempt from withholding,
has received $10,000 in regular and supplemental wages so far during the year, and is paid a bonus
of $1,000 during a payroll period?
The withholding exemption would apply to the supplemental wages as well, so no withholding for federal
income tax would be done.
What program does the Social Security Administration provide to verify employees’ social security
numbers?
Social Security Number Verification Service
What must an employer do after learning that a Form W‑4
submitted by a current employee is
invalid?
Not implement the Form W‑4
Which form is completed by recipients of periodic pension and annuity payments to determine the
amount of federal income tax to withhold?
W‑4S
Which of the following states allows employers to use the federal Form W‑4
to calculate state
income tax withholding?
Idaho
What is the Medicare wage base for 2022?
There is no limit on taxable Medicare wages.
If a payer receives a “B” notice from the IRS, how long does the payer have to send a copy to the
payee along with Form W‑9,
Request for Taxpayer Identification Number and Certification?
15 days
Employees’ paychecks are mailed from their corporate office on Monday for a Thursday payday.
Because of a natural disaster in the area no mail will be delivered until Saturday, when the employees
are not at work. So the employees can get paid during this week, the employer wires cash wages to
the employees on Friday. The checks arrive at the office on Monday. When are the wages considered
paid?
Friday
A newly hired employee who is married with two children fails to complete Form W‑4
by his
first payday. What withholding status does the employer use when calculating the employee’s
withholding?
Single or married filing separately, with no entries in Steps 2, 3, or 4