Whether you file the full Form 990 or the 990-EZ, you’ll report compensation information about 3 groups:
- Officers, directors, trustees, and key employees
- 5 highest compensated employees, if they were paid over $100,000
- 5 highest compensated independent contractors, if they were paid over $100,000
On the full 990, groups 1 and 2 are in the same list, with a second list immediately following for group 3 (both lists are in Part VII). On the 990-EZ, group 1 is in its own list (Part IV), and lists for groups 2 and 3 are in Part VI.
For both employees and contractors, compensation is for the calendar year that ended with or during your fiscal year. For example, if your fiscal year runs July 2017 through June 2018, you’ll report compensation for January through December 2017. As a result, the compensation reported on these schedules will be different than what’s reported in Part IX (Statement of Functional Expenses, not applicable if you’re filing the 990-EZ). This is a concession for ease of reporting; W-2 and 1099-MISC information is more readily available than payments made in the last 12 months ending June 30.
Compensation for contractors is straightforward, and can typically be taken from box 7 of the 1099-MISC you issued at the end of the year. Include the fees you paid to each contractor, but not reimbursement of expenses unless expenses and fees aren’t separately reported to you. A contractor only needs to be reported if you paid them over $100,000; write “none” if no contractors meet this threshold.
Groups 1 and 2 above reported differently based on whether you file the full 990 or 990-EZ. On the full 990, the reportable compensation from the filing organization and related organizations is the higher of box 1 or box 5 on their W-2s, or from 1099s for directors paid as contractors. Column F includes deferred compensation and certain fringe benefits (see the 990 instructions for more details). The most common benefits are deferred compensation, employer contributions to a defined contribution plan, increases in the actuarial value of defined benefits plans, employer-paid health benefits, and employee health benefits paid with pre-tax dollars.
On the 990-EZ, reportable compensation is also from their most recent W-2, or 1099-MISC for directors paid as contractors. Column D includes amounts paid for health insurance, medical reimbursement and flexible spending programs, and tax-deferred employer-funded contributions to retirement plans. If you have defined benefit retirement plan, also include the annual increase or decrease in actuarial value, regardless of whether it’s funded or vested. Column E includes any other fringe benefit you provide to the employees not reported in columns C or D. For the list of highest compensated employees, only report those who were paid over $100,000; write “none” if no employees meet this threshold.