CPP CERTIFICATION LATEST
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
Accountable plan business expenses: - ANSWER-Accountable plan business
expenses must be expenses with a business connection, expenses substantiated
within a reasonable period, and excess advances returned within a reasonable
period.
What are nontaxable awards? - ANSWER-Under certain conditions, length of
service and safety awards are not taxable.
What is taxable compensation? - ANSWER-All of an employee's compensation, in
whatever form, is taxable unless specifically excluded by law.
END OF
PAGE 1
, CPP CERTIFICATION LATEST
Nontaxable employer-provided meals: - ANSWER-EMPLOYER-PROVIDED
MEALS ARE NOT TAXABLE WHEN
FURNISHED ON THE EMPLOYER'S PREMISES AND FURNISHED FOR
THE CONVENIENCE OF THE EMPLOYER.
Necessary dependent care: - ANSWER-Nontaxable dependent care assistance
benefits are provided only when dependent care is necessary for the employee to
work. Dependent children must be under age 13 or cannot care for themselves.
Differential military pay taxation - ANSWER-FOR EMPLOYEES ON
TEMPORARY MILITARY ASSIGNMENT, DIFFERENTIAL MILITARY PAY
IS SUBJECT TO FITW, SOCIAL SECURITY AND MEDICARE TAXATION.
FOR EMPLOYEES ON ACTIVE DUTY, PAYMENTS ARE ONLY SUBJECT
TO FITW.
Stock purchase plan taxation - ANSWER-THE LESSER OF THE DIFFERENCE
BETWEEN THE OPTION PRICE AND FMV ON PURCHASE DATE OR
END OF
PAGE 2
, CPP CERTIFICATION LATEST
OPTION PRICE AND FMV ON SALE DATE IS TAXABLE FOR FEDERAL
INCOME TAX.
Is GTL excluded from income? - ANSWER-The first $50,000 of group term life
insurance coverage is excluded from income if the plan meets non discriminatory
testing requirements
A working condition fringe benefit is: - ANSWER-A non taxable benefit which
relates to the employee's trade or business provided to the employee.
What occurs when an ADP test fails? - ANSWER-WHEN (ACTUAL DEFERRAL
PERCENTAGE) ADP TEST FAILS, ALL EMPLOYEES WILL BE TAXED ON
THEIR ELECTIVE DEFERRALS UNLESS THE PLAN TAKES CORRECTIVE
ACTION, SUCH AS DISTRIBUTING CONTRIBUTIONS BACK TO HIGHLY
COMPENSATED EMPLOYEES.
END OF
PAGE 3
, CPP CERTIFICATION LATEST
Roth 401(k) contributions are: - ANSWER-SUBJECT TO FEDERAL INCOME,
SOCIAL SECURITY AND MEDICARE TAXES AND ARE REPORTED ON
FORM W-2 IN BOX 12 WITH CODE AA.
403(b) plans are for: - ANSWER-PUBLIC SCHOOLS AND TAX EXEMPT
CHARITABLE, RELIGIOUS, AND EDUCATIONAL ORGANIZATIONS.
401(k) annual contribution limit: - ANSWER-THE ANNUAL CONTRIBUTION
LIMIT IS OF THE LESSER OF $66,000 OR 100% OF THE EMPLOYEE'S
COMPENSATION FOR THE YEAR. IT IS THE MAXIMUM AMOUNT THAT
THE EMPLOYER AND EMPLOYEE MAY MAKE TO A 401(K) PLAN.
Qualified retirement plans must: - ANSWER-MUST BE IN WRITING, MUST BE
FOR THE BENEFIT OF EMPLOYEES, MEET ELIGIBILITY AND VESTING
REQUIREMENTS, AND NOT DISCRIMINATE IN FAVOR OF HIGHLY
COMPENSATED EMPLOYEES.
END OF
PAGE 4
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
Accountable plan business expenses: - ANSWER-Accountable plan business
expenses must be expenses with a business connection, expenses substantiated
within a reasonable period, and excess advances returned within a reasonable
period.
What are nontaxable awards? - ANSWER-Under certain conditions, length of
service and safety awards are not taxable.
What is taxable compensation? - ANSWER-All of an employee's compensation, in
whatever form, is taxable unless specifically excluded by law.
END OF
PAGE 1
, CPP CERTIFICATION LATEST
Nontaxable employer-provided meals: - ANSWER-EMPLOYER-PROVIDED
MEALS ARE NOT TAXABLE WHEN
FURNISHED ON THE EMPLOYER'S PREMISES AND FURNISHED FOR
THE CONVENIENCE OF THE EMPLOYER.
Necessary dependent care: - ANSWER-Nontaxable dependent care assistance
benefits are provided only when dependent care is necessary for the employee to
work. Dependent children must be under age 13 or cannot care for themselves.
Differential military pay taxation - ANSWER-FOR EMPLOYEES ON
TEMPORARY MILITARY ASSIGNMENT, DIFFERENTIAL MILITARY PAY
IS SUBJECT TO FITW, SOCIAL SECURITY AND MEDICARE TAXATION.
FOR EMPLOYEES ON ACTIVE DUTY, PAYMENTS ARE ONLY SUBJECT
TO FITW.
Stock purchase plan taxation - ANSWER-THE LESSER OF THE DIFFERENCE
BETWEEN THE OPTION PRICE AND FMV ON PURCHASE DATE OR
END OF
PAGE 2
, CPP CERTIFICATION LATEST
OPTION PRICE AND FMV ON SALE DATE IS TAXABLE FOR FEDERAL
INCOME TAX.
Is GTL excluded from income? - ANSWER-The first $50,000 of group term life
insurance coverage is excluded from income if the plan meets non discriminatory
testing requirements
A working condition fringe benefit is: - ANSWER-A non taxable benefit which
relates to the employee's trade or business provided to the employee.
What occurs when an ADP test fails? - ANSWER-WHEN (ACTUAL DEFERRAL
PERCENTAGE) ADP TEST FAILS, ALL EMPLOYEES WILL BE TAXED ON
THEIR ELECTIVE DEFERRALS UNLESS THE PLAN TAKES CORRECTIVE
ACTION, SUCH AS DISTRIBUTING CONTRIBUTIONS BACK TO HIGHLY
COMPENSATED EMPLOYEES.
END OF
PAGE 3
, CPP CERTIFICATION LATEST
Roth 401(k) contributions are: - ANSWER-SUBJECT TO FEDERAL INCOME,
SOCIAL SECURITY AND MEDICARE TAXES AND ARE REPORTED ON
FORM W-2 IN BOX 12 WITH CODE AA.
403(b) plans are for: - ANSWER-PUBLIC SCHOOLS AND TAX EXEMPT
CHARITABLE, RELIGIOUS, AND EDUCATIONAL ORGANIZATIONS.
401(k) annual contribution limit: - ANSWER-THE ANNUAL CONTRIBUTION
LIMIT IS OF THE LESSER OF $66,000 OR 100% OF THE EMPLOYEE'S
COMPENSATION FOR THE YEAR. IT IS THE MAXIMUM AMOUNT THAT
THE EMPLOYER AND EMPLOYEE MAY MAKE TO A 401(K) PLAN.
Qualified retirement plans must: - ANSWER-MUST BE IN WRITING, MUST BE
FOR THE BENEFIT OF EMPLOYEES, MEET ELIGIBILITY AND VESTING
REQUIREMENTS, AND NOT DISCRIMINATE IN FAVOR OF HIGHLY
COMPENSATED EMPLOYEES.
END OF
PAGE 4
