Betty's CPP Section 4 Quiz Health, Accident, & Retirement Benefits Flashcards
1
Q
- At what age is an employee no longer subject to a 10% excise tax when the employee receives a distribution from his or her qualified retirement plan?
A
59 1/2
2
Q
- If an employer wants to offer a SIMPLE plan to its employees, how many employees must work for the company)
A
c. No more than 100 employees
3
Q
- Which of the following developments is not a circumstance that would allow benefit changes during the plan year under a cafeteria plan?
A
b. The company institutes a 1% across-the-board salary reduction
4
Q
- The Family and Medical Leave Act applies to private sector employers with:
A
c. 50 or more employees
5
Q
- Under the employer’s disability plan, the employer pays 80% of the cost of insurance and the employee pays the difference. An employee received $3,000 in disability pay from a third-party insurer during the first six calendar months of disability, and $500 a month for each of the next three months. How much of the disability pay is taxable for social security and Medicare, and how much is taxable for FIT)
A
Only 80% of the benefit is taxable for FIT, SS & Medicare; d. $2,400 SS and Med taxable, $3,600 FIT taxable
6
Q
- An employer pays for 100% of the insurance for its employees as part of a sickness and disability benefits plan. Assume an employee received $1,800 in disability pay from a third-party insurer during the first six calendar months of disability and $600 over the seventh and eighth months. How much of the disability pay would be social security and Medicare taxable, and how much is FIT taxable?
A
b. $1,800 SS and Med. taxable, $2,400 FIT taxable
7
Q
- To which taxes are payments received as workers’ compensation subject?
A
d. Workers’ compensation benefits are not taxable
8
Q
- An agreement is made between the employer and the employees whereby the employer pays the employees all or part of their salary while they are receiving workers’ compensation benefits, in return for which the employees turn over their workers’ compensation benefits to the employer. Under such an arrangement, any amount paid in excess of the employee’s workers’ compensation benefits is wages subject to:
A
c. Social security, Medicare, and federal income taxes
9
Q
- Which of the following benefits is not a qualified benefit for a cafeteria plan?
A
b. Working condition fringes
10
Q
- Under a dependent care assistance flexible spending arrangement, employees may be reimbursed up to what amount of dependent care expenses for each plan year?
A
$5,000
11
Q
- Mark contributes $75 per month to a flexible spending arrangement as part of a cafeteria plan to pay for uncovered medical and dental expenses for his family. At the end of the year (the plan has no grace period or carryover), Mark has $250 left in the account. What happens to the balance in the account)
A
b. The balance is forfeited
12
Q
- Tammy selects a dependent care package from her employer’s cafeteria plan. The cost of the package is $200 per month. Tammy’s employer pays $150 per month to her cafeteria plan and Tammy defers part of her salary to pay the difference. What taxes must the employer withhold?
A
d. No taxes must be withheld from either the employer or employee contribution
13
Q
- Johnny’s employer contributes $150 per month to his stock bonus option plan as part of his benefits package. Johnny now wishes to take the $150 per month in cash. What will be the tax treatment of the benefit?
A
c. The $150 is subject to federal income tax withholding and social security, Medicare and FUTA taxes
14
Q
- For 2024, the maximum amount of salary that an employee may elect to defer to a §401(k) plan that does not allow catch-up contributions is:
A
$23,000
15
Q
- Which of the following statements is true concerning employee salary deferrals to a §401(k) plan ?
A
b. They are subject to social security and Medicare tax withholding
16
Q
- The special discrimination tests for §401(k) plans are both based on the ADP of employees who are eligible to participate in the plan. What does ADP mean?
A
c. Actual deferral percentage
