Davis Reyes is the accounting for Heads Up Hat Corporation. As he prepares the payroll for the semimonthly pay period ending December 15, he notices that some of the year-to-date executives' salaries have exceeded $200,000. What payroll tax responsibilities does Heads Up Hat Corporation have, especially regarding FICA taxes?
What will be an ideal response?
A. Social security tax must be deducted from the executives' pay for those under the cap and matched by the corporation.
B. An additional 0.9% Medicare tax must be deducted from employee pay for those over the base, but no corporate match is required.
C. Medicare taxes should be deducted from all employees’ pay and matched by the corporation.
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