FPC EXAM QUESTIONS AND ANSWERS PASS GUARANTEED PASS 2025 NEWEST VERSION
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Module
FPC
Institution
FPC
FPC EXAM QUESTIONS AND ANSWERS PASS GUARANTEED PASS 2025 NEWEST VERSION
What is a cafeteria plan? - Answer-A plan in which all participants are employees who choose from a minimum of two or more benefits that consist of cash and qualified benefits.
What are some qualified benefits? - Answer...
FPC EXAM QUESTIONS AND ANSWERS
PASS GUARANTEED PASS 2025
NEWEST VERSION
What is a cafeteria plan? - Answer-A plan in which all participants are employees who
choose from a minimum of two or more benefits that consist of cash and qualified
benefits.
What are some qualified benefits? - Answer-Health plans, GTL, Health Savings
Accounts, Cash, Cash.
What are some benefits not qualified to be in a cafeteria plan? - Answer-Scholarships,
employee discounts, working condition fringes, qualified transportation fringe benefits
What are Premium-Only Plans - Answer-Plans that require their employees to
contribute towards benefits (health insurance)
What tax does Pre-Tax contributions to Cafeteria plans affect? - Answer-Federal
Income Tax
What is the grace period for unused funds in a health FSA? - Answer-2.5 months
What is the carryover limit for health FSA's? - Answer-$500
Can a health FSA have both a carryover and a grace period? - Answer-No
What is different about Special Dependent Care Assistance FSA rules? - Answer-
Uniform coverage is not required. Employee can only be reimbursed for the amount
they have contributed in premiums.
Medical expenses may only be reimbursed if the employee... - Answer-Provides
substantiation:
1. An independent third party (doctor) stating the amount incurred
2. The employee stating the expense has not yet been reimbursed and is not
reimbursable under any health coverage
What is the FUTA wage base? - Answer-$7,000
, Can employers claim a refund if an employee earned more than $7,000 in the
applicable year the overpayment was made? - Answer-No- only if the employee earned
less than $7,000
What is the procedure if the employee repays overpayment within the same year? (FIT)
- Answer-The employer excludes the amount from the employee's income when
reporting on Form W-2.
What is the procedure if the employee repays the overpayment in a later year? (FIT) -
Answer-The amount cannot be excluded from income from that year or any year.
What is the procedure if an employee repays after the employer filed in Form 941? (SS
& Medicare) - Answer-The employer must refund overwithheld SS & Medicare Taxes to
the employee IF the employee earned less than the wage base.
When must employees report their tips to their employer? - Answer-At least once a
month by the 10th
What awards or prizes provided to employees are not included in income? - Answer-
Length of service or safety achievement awards, Civic and charitable awards, Prizes for
retail salespeople.
What is the minimum length of employment in order for a length of service award to not
be included in income? - Answer-5 years
What is the maximum deduction a year allowed for a single employee for a qualified
plan award? - Answer-$1,600
What is the maximum deduction a year allowed for a single employee for a non qualified
plan award? - Answer-$400
What taxes are prizes for retail salespeople subject to? - Answer-SS, Medicare, and
FUTA taxes. However, they must be reported on the W2.
What is the General Valuation Method? - Answer-The fair market value of a company-
provided vehicle that an individual would pay to lease the same or a comparable vehicle
in an arm's length transaction.
What is the commuting valuation method? - Answer-Allows an employer to value an
employee's personal personal commuting use of an employer-provided vehicle at $1.50
per one-way commute and $3.00 round trip.
What is a control employee - Answer-1. A corporate officer earning at least $105,000
2. A director
3. Earns at least $215,000
4. Is a 1% owner
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