- (Topic 1)
Which form is used by third-party administrators to report sick pay paid on behalf of an employer?

1. A. Form 941
2. B. Form 1099
3. C. Form 8922
4. D. Form 1095-B

Correct Answer: C
Comprehensive and Detailed Explanation:Form 8922, Third-Party Sick Pay Recap,is used when athird-party administrator (TPA)payssick payon behalf of an employer and needs toreport taxable wages properly.
✑ This ensures thatSocial Security, Medicare, and FUTA taxesare correctly allocated
between theemployer and third party.
✑ Sick pay is subject to FICA taxes, butnot always subject to FUTAif paid directly by an insurer.
✑ Option A (Form 941)is incorrect because it is used forquarterly payroll tax filings.
✑ Option B (Form 1099)is incorrect becausesick pay is reported on W-2, not 1099.
✑ Option D (Form 1095-B)is incorrect because it relates tohealth coverage reporting.
Reference:
IRS Form 8922 Instructions – Third-Party Sick Pay Recap Payroll.org – Sick Pay Taxation Guidelines

- (Topic 1)
An employee has YTD wages in the amount of $250,000.00 and receives a $1,753.00 bonus payment. Using the optional flat rate method, calculate the federal income tax withholding from the bonus payment.

1. A. $385.00
2. B. $420.13
3. C. $534.63
4. D. $647.50

Correct Answer: A
Comprehensive and Detailed Explanation:Under IRS guidelines,supplemental wages such as bonusesare subject to aflat federal tax rate of 22%if paid separately.
✑ Federal Tax Calculation:
Thus, the correct answer isA. $385.00.
Reference:
IRS Publication 15-T – Federal Income Tax Withholding Methods Payroll.org – Supplemental Wage Withholding Rules

- (Topic 2)
A paycheck that is never collected by the employee is considered:

1. A. Voided.
2. B. Written off.
3. C. Accounts payable.
4. D. Abandoned property.

Correct Answer: D
✑ Unclaimed wages are classified as abandoned property under escheatment laws.
✑ Employers mustremit unclaimed wages to the state after a certain period.
✑ Voiding (A) and writing off (B) apply only when payroll errors occur. References:
✑ Unclaimed Property Laws (State Escheatment Regulations)
✑ Payroll Compliance Guide (Payroll.org)

- (Topic 2)
Which of the following awards are included in an employee's taxable income?

1. A. A $5.00 restaurant gift card
2. B. A coupon for a free holiday turkey
3. C. A wearable fitness tracker for a safety award
4. D. An engraved clock, valued at $100.00, to celebrate an employee's retirement

Correct Answer: A
✑ Cash equivalents, such as gift cards (A), are always taxable income.
✑ Nominal gifts (B, C, D) are generally tax-exempt under de minimis rules.
References:
✑ IRS Publication 15-B (Taxable Fringe Benefits)

- (Topic 2)
Which of the following items is NOT found on an employee??s master file?

1. A. Marital status
2. B. Date of birth
3. C. Address
4. D. SSN

Correct Answer: A
✑ The employee master file contains essential payroll data, including DOB, SSN, and address.
✑ Marital status is typically recorded on tax withholding forms (e.g., Form W-4) but is
not a standard master file entry. References:
✑ Payroll Data Management Standards (Payroll.org)