Not quite. The answer is D: 90 percent.
Section 3302 states that total credits shall not exceed 90 percent of the tax, which on the 6.0 percent rate is a maximum credit of 5.4 percent. A 100 percent credit would wipe out the federal tax entirely, which the cap prevents. The 54 percent figure misreads the 5.4 percent credit rate as a percentage of the tax. The 10 percent figure is the share of the tax that remains after the maximum credit, not the credit cap.
0 of 1 right so far.
Question 2 of 10.
A framing contractor signs an agreement calling a carpenter an 'independent contractor,' but sets the carpenter's daily hours, dictates the framing methods, pays a regular hourly wage, and expects to keep the carpenter on indefinitely. How is the carpenter classified for federal employment tax purposes?
A: As an independent contractor, because an open-ended relationship shows independence
B: As an employee only if the carpenter works more than 40 hours a week
C: As an employee, because the business controls what is done and how it is done
D: As an independent contractor, because the written agreement says so
NEXT: A · B · C · D
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