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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Under which IRC requirements do qualified plans fall?

Defined benefit plans
Defined contribution plans
Both defined benefit and defined contribution plans
Employer-required health insurance deductibles

The correct answer is: Both defined benefit and defined contribution plans

Qualified plans must adhere to both defined benefit and defined contribution requirements under the Internal Revenue Code (IRC). Defined benefit plans specify the benefit to be received upon retirement, usually based on salary and years of service, while defined contribution plans determine the contributions made to employees' individual accounts. Both types of plans must meet specific criteria set forth by the IRC to maintain their tax-qualified status.