Oscar, an employee of Chromachron Corporation, was seriously injured in a car accident on January 1, 2021. Oscar's last day of work was December 31, 2020. The accident was not job-related.

Acme, an insurance company that was not an agent of the employer, paid Oscar $2,000 each month for 10 months, beginning in January 2021. Oscar submitted a Form W-4S to Acme, requesting $210 to be withheld from each payment for federal income tax. Oscar received no payments from Chromachron, his employer, from January 2021 through October 2021. Oscar returned to work in November 2021.

The plan was, therefore, a "contributory plan": For the policy year in which the car accident occurred, Oscar paid a part of the premiums for his coverage, and Chromachron paid the remaining part. During the three policy years before the calendar year of the accident, Chromachron paid 70% of the total of net premiums for its employees' insurance coverage, and its employees paid 30%.

1. For Social Security and Medicare tax purposes, how much taxable sick pay did Oscar receive per month?

A. $1,400.

B. $2,000.

C. $210.

2. What's the total amount of taxable sick pay Oscar receives?

A. $14,000

B. $8,400

C. $20,000

3. What would be Oscar's last payment that has taxes withheld from it?

A. October

B. June

C. January

4. How much of the total taxable amount of Oscar's sick pay is subject to FUTA tax?

A. $8,400

B. $7,000

C. $20,000

5. How much total voluntary income tax withholding is Oscar subject to?

A. $2,000

B. $1,260

C. $2,100

Answer rating: 100% (QA)

ANSWER 1 B 2000 2 C 20000 3 A October 4 B 7000 5 B 1260 CALCULATION 1 The monthly payments Oscar rec... View the full answer