Certified Payroll Professional Practice Exam

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Prepare for the Certified Payroll Professional Exam with our comprehensive quiz. Featuring flashcards and multiple-choice questions tailored to key payroll concepts, our resources equip you for success in your certification journey.

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How does the Railroad Retirement Tax Act fund railroad worker retirement benefits?

  1. By imposing state taxes

  2. By collecting fees from the employees

  3. By IRS collection of imposed taxes

  4. By direct government funding

The correct answer is: By IRS collection of imposed taxes

The correct answer is C. The Railroad Retirement Tax Act funds railroad worker retirement benefits by the IRS collection of imposed taxes. The Act requires both railroad employees and employers to pay taxes into the Railroad Retirement systems to fund benefits for retired railroad workers and their families. This funding mechanism is separate from state taxes, fees collected directly from employees, or direct government funding, making option C the most appropriate choice.

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