1. What is the California SETT rate?

A. None of the above

B. 1.1%

C. 1.0%

D. 0.8%

E. 0.1%

2. In 2020 and 2019, a 22% withholding tax rate is allowed for Supplemental wages.

A. true

B. false

3.The supplemental withholding tax rate of 24% may be used when supplemental wages are paid separately from regular wages or if combined with regular wages are clearly indicated as a separate amount.

A. true

B. false

4. The percentage method of withholding most closely approximates the tax withheld by automated payroll systems.

A. true

B. false

5. Bonuses, commission, and overtime pay are all examples of supplemental wages.

A. true

B. false

6. Supplemental wages in excess of $1 million are subject to a flat rate of 39% tax.

A. true

B. false

7. De Minimis fringe benefits are not taxable because their value is so small like a small cash payment or a gift card.

A. true

B. false

8. Reimbursements for work-related expenses or benefits are known as 'working condition fringes." like business travel expenses and membership in professional associations.

A. true

B. false

9. To become tax-free, the discount to employees offered by employers should not be too much. Employees should pay an amount at least equal to the cost of merchandise or if it is a service then the discount can not exceed 25% of the price customers normally pay.

A. true

B. false

10. Employer-provided adoption benefits should be shown in box 12 of your Form(s) W-2 with code T. Your salary may have been reduced to pay these benefits. You may also be able to exclude amounts not shown in box 12 of your Form W-2 if all of the following apply.

• You adopted a child with special needs. See Column (d) for the definition of a child with special needs.

• The adoption became final in that tax year.

• Your employer had a written qualified adoption assistance program

A. true

B. false

11.

Question

Why does my Form W-2 report a benefit of $3,000 in box 10 when my employer set aside $3,000 in wages for dependent care under a dependent care assistance plan?

Answer

When you choose to participate in a dependent care assistance program through your employer, your employer has to report that value in box 10 of your Form W-2. This type of plan is a voluntary agreement to reduce your salary in return for an employer-provided fringe benefit.

You're receiving a tax benefit because under the plan, you're not paying taxes on the money set aside to pay for the dependent care.

A. true

B. false