FPC Payroll Fundamentals questions and
answers 2026\2027 A+ Grade
Worker that has Fed, OASDI, Medicare, State withheld
- correct answer Employee
Worker that requires the employer to pay ER taxes
- correct answer Employee
Worker that receives W2 form
- correct answer Employee
Worker that does not have taxes withheld
- correct answer Independent Contractor
Worker that has TIN
- correct answer Independent Contractor
Worker that receives 1099 Form
- correct answer Independent Contractor
Asks how independent is the employee and how much control can be exervised over the worker.
- correct answer Common Law Test
A worker cannot sign a new contract stating that they will be an indepndent contractor.
- correct answer Common Law Test
Employer has treated similar workers as independent contractors for any period and has filed tax
returns
- correct answer Reasonable Basis Test
, Longstanding industry standard of treating similar workers as independent contractors
- correct answer Reasonable Basis Test
Court decisions for treating workers in similar circumstances as independent contractors
- correct answer Reasonable Basis Test
IRS has ruled in a "published ruling" that the workers are indpendent contractors
- correct answer Reasonable Basis Test
Temporary Service Provider or Leasing Company
- correct answer Pays employees and taxes instead of company the employee is performing services for
Immigration reform and Control Act of 1986 (IRCA)
- correct answer Requires employer to verify employees' eligibility for employment in the US.
Penalties for Violating IRCA
- correct answer $375 for the first offence and $16,000 for the third
Antidiscrimination under IRCA
- correct answer The law prohibits discrimination in hiring or recruiting workers on the basis of national
origin or citizenship
Verification of eligitability
- correct answer The burden of verifying that any employee is eligible to work in this country falls on the
employer. All employees hired after November 6, 1989 must be verified.
When must Section 1 of Form I-9 be completed?
- correct answer The employee's date of hire.
When must Section 2 of Form 1-9 be completed?
- correct answer Within three days of hiring the employee.
answers 2026\2027 A+ Grade
Worker that has Fed, OASDI, Medicare, State withheld
- correct answer Employee
Worker that requires the employer to pay ER taxes
- correct answer Employee
Worker that receives W2 form
- correct answer Employee
Worker that does not have taxes withheld
- correct answer Independent Contractor
Worker that has TIN
- correct answer Independent Contractor
Worker that receives 1099 Form
- correct answer Independent Contractor
Asks how independent is the employee and how much control can be exervised over the worker.
- correct answer Common Law Test
A worker cannot sign a new contract stating that they will be an indepndent contractor.
- correct answer Common Law Test
Employer has treated similar workers as independent contractors for any period and has filed tax
returns
- correct answer Reasonable Basis Test
, Longstanding industry standard of treating similar workers as independent contractors
- correct answer Reasonable Basis Test
Court decisions for treating workers in similar circumstances as independent contractors
- correct answer Reasonable Basis Test
IRS has ruled in a "published ruling" that the workers are indpendent contractors
- correct answer Reasonable Basis Test
Temporary Service Provider or Leasing Company
- correct answer Pays employees and taxes instead of company the employee is performing services for
Immigration reform and Control Act of 1986 (IRCA)
- correct answer Requires employer to verify employees' eligibility for employment in the US.
Penalties for Violating IRCA
- correct answer $375 for the first offence and $16,000 for the third
Antidiscrimination under IRCA
- correct answer The law prohibits discrimination in hiring or recruiting workers on the basis of national
origin or citizenship
Verification of eligitability
- correct answer The burden of verifying that any employee is eligible to work in this country falls on the
employer. All employees hired after November 6, 1989 must be verified.
When must Section 1 of Form I-9 be completed?
- correct answer The employee's date of hire.
When must Section 2 of Form 1-9 be completed?
- correct answer Within three days of hiring the employee.
