Certified Payroll Professional Practice Exam

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Prepare for the Certified Payroll Professional Exam with comprehensive flashcards and multiple choice questions. Each question is accompanied by detailed hints and explanations to aid your understanding. Get ready to ace your Certified Payroll Professional Exam!

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In which situation are employees subject to Social Security tax withholding through mandatory coverage?

When covered by a public retirement plan
When covered by Railroad Retirement Tax Act
When residing in multiple states
When working under Section 218 Agreement

The correct answer is: When covered by a public retirement plan

Employees are subject to Social Security tax withholding through mandatory coverage when they are covered by a public retirement plan. This plan is part of the Social Security program and requires mandatory coverage for those employees who participate in specific public retirement plans. Options B, C, and D are not correct because they do not directly relate to mandatory coverage for Social Security tax withholding. The Railroad Retirement Tax Act refers to a separate system for railroad workers, residing in multiple states would not automatically trigger Social Security tax withholding, and Section 218 Agreements are specific agreements between state and local governments and the Social Security Administration for coverage under the Social Security system.