Certified Payroll Professional Practice Exam

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What is the purpose of Form W-4P in the payroll process?

  1. Request for paid time off

  2. Withholding tax from salary payments

  3. Enrollment in pension plans

  4. Authorization for direct deposit

The correct answer is: Withholding tax from salary payments

Form W-4P is specifically used for withholding tax from payments such as pensions, annuities, or any other periodic payments. It allows the payee to specify the amount they want to withhold for federal income tax purposes. This form is essential for ensuring that the correct amount of tax is withheld from the payment to avoid underpayment or overpayment. Option A, requesting paid time off, is unrelated to Form W-4P. Option C, enrolling in pension plans, typically involves different forms specific to the pension plan. Option D, authorizing direct deposit, is also not the purpose of Form W-4P.

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