FPC STUDY SHEET 2026 UPDATED
QUESTIONS AND SOLUTIONS
◉ Medicare tax rate.
Answer: 1.45% no cap additional .09 when above $200,000
◉ social security base.
Answer: $128,400
◉ minimum wage.
Answer: 7.25
◉ Form I-9.
Answer: Employment Eligibility Verification
Employers responsibility.
◉ Form W-4 (Employee's Withholding Allowance Certificate).
Answer: The form that determines the percentage of an employee's
pay that will be withheld for federal taxes.
Must be completed on or before first day of work.
,Changes must be in effect no later than the beginning of the first
payroll period ending on or after 30 days after new form is filed.
◉ Form SS-4.
Answer: Application for Employer Identification Number (EIN)
◉ SSNVS.
Answer: Social Security Number Verification Service
◉ Unintentional misclassification of employee/contractor.
Answer: FIT penalty of 1.5% of wage paid (3% if no 1099 was filed)
FICA penalty of 20% of employee tax owed plus employer's share
(40% if no 1099 was filed)
◉ Intentional misclassification of emp/contractor.
Answer: 100% of FIT, FICA plus employer's share / subject to
additional fines
◉ Statutory Employee: DISH.
Answer: Drivers
Insurance Salespersons
Salespersons
Homeworkers
,◉ Statutory Non-Employee: REDS.
Answer: Real
Estate Agents
Direct
Sales
◉ reasonable basis test.
Answer: Section 530 safe harbor rule: An employer may treat
workers considered employees under the common law test as
independent contractors.
◉ form SS-8.
Answer: Determination of Worker Status for Purposes of Federal
Employment Taxes and Income Tax Withholding
◉ Common Law Test.
Answer: a widely used method for determining employee status
◉ Backup Withholding Rate.
Answer: 24%
, ◉ New Hire Reporting.
Answer: Must occur within 20 days of hire.
Rehires must be reported if separated more than 60 days.
Penalty of no more than $25 for failure to comply.
States have 5 business days to enter into database, 3 days to national
database, 2 days to issue child support.
◉ FLSA (Fair Labor Standards Act).
Answer: regulates minimum wage, maximum hours & child labor
laws
◉ Enterprise Coverage (FLSA).
Answer: Business has annual gross sales of at least $5000,000
◉ Individual Employee Coverage.
Answer: Engaged in interstate commerce.
◉ Exempt employees.
Answer: Employees who are excluded from U.S. Fair Labor
Standards Act minimum wage and overtime pay requirements.
◉ Nonexempt employees.
QUESTIONS AND SOLUTIONS
◉ Medicare tax rate.
Answer: 1.45% no cap additional .09 when above $200,000
◉ social security base.
Answer: $128,400
◉ minimum wage.
Answer: 7.25
◉ Form I-9.
Answer: Employment Eligibility Verification
Employers responsibility.
◉ Form W-4 (Employee's Withholding Allowance Certificate).
Answer: The form that determines the percentage of an employee's
pay that will be withheld for federal taxes.
Must be completed on or before first day of work.
,Changes must be in effect no later than the beginning of the first
payroll period ending on or after 30 days after new form is filed.
◉ Form SS-4.
Answer: Application for Employer Identification Number (EIN)
◉ SSNVS.
Answer: Social Security Number Verification Service
◉ Unintentional misclassification of employee/contractor.
Answer: FIT penalty of 1.5% of wage paid (3% if no 1099 was filed)
FICA penalty of 20% of employee tax owed plus employer's share
(40% if no 1099 was filed)
◉ Intentional misclassification of emp/contractor.
Answer: 100% of FIT, FICA plus employer's share / subject to
additional fines
◉ Statutory Employee: DISH.
Answer: Drivers
Insurance Salespersons
Salespersons
Homeworkers
,◉ Statutory Non-Employee: REDS.
Answer: Real
Estate Agents
Direct
Sales
◉ reasonable basis test.
Answer: Section 530 safe harbor rule: An employer may treat
workers considered employees under the common law test as
independent contractors.
◉ form SS-8.
Answer: Determination of Worker Status for Purposes of Federal
Employment Taxes and Income Tax Withholding
◉ Common Law Test.
Answer: a widely used method for determining employee status
◉ Backup Withholding Rate.
Answer: 24%
, ◉ New Hire Reporting.
Answer: Must occur within 20 days of hire.
Rehires must be reported if separated more than 60 days.
Penalty of no more than $25 for failure to comply.
States have 5 business days to enter into database, 3 days to national
database, 2 days to issue child support.
◉ FLSA (Fair Labor Standards Act).
Answer: regulates minimum wage, maximum hours & child labor
laws
◉ Enterprise Coverage (FLSA).
Answer: Business has annual gross sales of at least $5000,000
◉ Individual Employee Coverage.
Answer: Engaged in interstate commerce.
◉ Exempt employees.
Answer: Employees who are excluded from U.S. Fair Labor
Standards Act minimum wage and overtime pay requirements.
◉ Nonexempt employees.
