What is the Wage Limit for Social Security withholdings in 2025?
176,100.00
Name the three major types of health care plans offered by employers to their employees.
1)HMO - PREPAID; SIMPLE FOR EE BUT LIMITS DR & HOSPITALS
2)PPO - LOWER $ IN NETWORK; HIGHER $ THAN HMO; CAN CHOOSE OUT OF NETWORK
3)TRAD: 3RD PARTY CARRIER; ER SELF-ENSURED OR COMBO TO LIMIT LIABILITY
NAME THE 3 NON-DISCRIMINATION TESTS CAFETERIA PLANS MUST SATISFY TO QUALIFY FOR PRE TAX TREATMENT
- Eligibility test - EQUALITY FOR ACCESS ACROSS MORE THAN JUST HIGHLY COMPTED EMPLOYEES
- Contributions and benefits test - CANNOT MORE SELECTIVE IN FAVOR OF HIGHLY COMPTED EE’S
- Concentration test - HIGHLY COMPTED EXCLUSIVE CANNOT BE MORE THAN 25% OF WHAT’S AVAIL. TO ALL OTHER EE’S
Can an employee of a public school who participates in a §403(b) tax‑sheltered
annuity also participate in
a §401(k) plan?
Only if the §401(k) plan existed prior to the effective date of the Tax Reform Act of 1986.
HOW DOES IRC DETERMINE “MEDICAL CARE” IN TERMS OF EE’S REIMBURSEMENT FOR SUCH CARE
AMOUNTS PAID FOR DIAGNOSIS, CURE, MITIGATION, TREATMENT, OR PROVENTION OF DISEASE - OR FOR THE PURPOSE OF AFFECTING ANY STRUCTURE OR FUNCTION OF THE BODY
WHAT’S THE DIFFERENCE BETWEEN SICK PAY AND WORKER’S COMP INSURANCE?
SICK PAY is to replace the wages of an employee who cannot
work because of a nonjob‑related
illness or injury. Workers’ compensation, however, deals with payments
to employees who cannot work because of job‑related
injuries or illness.
WHAT CONDITIONS MUST BE SATISFIED FOR AN ER PROVIDED GROUP HEALTH INSURANCE PLACE TO BE NON-DISCRIM. IN TERMS OF ELIGIBILITY & BENEFITS
At least 70% of all employees
* At least 80% of all employees who are eligible to participate in the plan (if at least 70% of all employees
are eligible to participate) or
* A classification of employees that the Secretary of the Treasury finds not to be discriminatory
Employers are assigned “classification codes” based on their type of business for determining the employer’s
workers’ compensation premium. Outline the classification code exemptions.
EXCEPTIONS FOR: OFFICE; OUTSIDES SALES; AND DRIVERS OR THEIR HELPERS
In terms of third‑party
sick pay, what information should the employer provide the third party to aid the
third party in properly meeting its withholding, depositing, and reporting responsibilities?
TOTAL WAGES
LAST MONTH EE WORKED PRIOR
EE’S CONTRIBUTIONS MADE POST-TAX TOWARDS COST OF INSURANCE (HELPS DETERMIAN AMOUNT TAXABLE)
What information must the payroll department maintain for the proper administration of defined benefit plans?
- Hours worked
- Compensation earned
- Date of birth
- Date of hire
WHAT CAN BE EXCLUDED WHEN THE ER’S CALC WORK COMP PREMIUMS?
ONLY PREMIUM OT PAY IS EXCLUDED FROM AN ER’S TOTAL PAYROLL WHEN CALCULATING WORKER COMP PREMIUMS
CAN ER’S REQUIRE ELIGIBLE EE’S TO USE ANY PAID VAC/PTO TIME TO COVER PART OF 12 WEEK FMLA LEAVE
YES!
Can Employer contributions to an accident or health insurance plan that provides insurance for its
employees and their spouses and dependents be considered wages that are subject to federal
income withholding, social security, Medicare, and FUTA taxes?
NO! Employer contributions to an accident or health insurance plan for the benefit of its employees
and their spouses, dependents, and adult children under age 27 are not wages and are not subject
to federal income tax withholding or social security, Medicare, and FUTA taxes.
Do the general rules for depositing withheld federal income, social security, and Medicare taxes
apply to sick pay?
Yes, The general rules for depositing withheld federal income, social security, and Medicare taxes do
apply to sick pay, although the party liable for depositing the taxes may change.
What is the rollover limit for Health FSA funds?
in 2025 an employee could carry over $660 in their Health FSA
What Aged is an EE no long subject to a 10% excise tax when receiving Distribution from a qualified retirement plan?
59.5 (59 & 1/2)
What is the Minimum # of EE’s an ER’ must have to offer a “SIMPLE” plan?
No Minimum, but cannot exceed 100 employees
Is a 1% across the board salary reduction considered a qualifying event that would allow changes during the plan year, under a cafeteria plan?
- Death of the covered employee
- The covered employee’s termination of employment (for reasons other than gross misconduct) or
reduction in hours worked - Divorce or separation of the covered employee
- Entitlement of the covered employee to Medicare benefits (upon enrolling in the program)
- A covered child losing that status
- Bankruptcy proceedings that cause a retired covered employee or the employee’s dependents to lose coverage
For payments made to a disabled employee by a third party who is not an agent, the third
party is not required to withhold federal income tax unless the employee requests that a
certain amount be withheld by furnishing the third party with:
W4-S
An employee has been absent from work for 9 months because of a non‑job‑related
illness and
is not expected to return to work for another 3 months. Which taxes must be withheld at this
point from disability payments made to the employee by the employer?
Federal income tax only; Social Security, Medicare, and FUTA taxes are no longer applicable
Which Taxes are Worker’s Comp Payments Subject to?
NONE!
An employee receives serious car injuries while away from work on February 15, 2025, and
does not return to work until November 1, 2025. Through what date must the employer
withhold and pay social security, Medicare, and FUTA taxes on sick pay given to the employee
by the employer?
c. August 31, 2025 (Through the end of the month containing the 6 month mark)
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?
Actual deferral percentage
For 2025, the maximum amount of salary that an employee may elect to defer to a §401(k) or 403 (b)
plan that does not allow catch‑up
contributions is:
$23,500 in 2025.
