Reporting Compensation - Form 990

Not-for-Profit_Image-3.jpgReporting compensation of officers, directors, trustees, key employees, and highest compensated employees on Form 990

Compensation to be reported for 990 purposes includes reportable compensation (greater of Form W-2, Box 1 or 5 and/or Form 1099-Misc, Box 7 (without regard to the $600 threshold for Form 1099-MISC)), and other compensation such as health and medical benefits, retirement plan contributions, and non-retirement deferred compensation.  Compensation paid by related organizations is also required to be reported. 

If the organization is on a fiscal year end, the compensation required to be reported on Form 990, Part VII, Section A is for the calendar year that falls within the fiscal year under consideration.  However, compensation is to be reported on a fiscal year basis for purposes of reporting on the Statement of Functional Expenses (Form 990, Part IX). 

There are no thresholds for reporting the compensation of officers, directors, and trustees.  Highest compensated employees are those that do not fit into any of the prior classifications and receive compensation in excess of $100,000.  Only the five highest compensated employees are required to be disclosed.  In addition to the above, the five highest compensated independent contractors paid in excess of $100,000 are also required to be disclosed. 

An employee who was classified as an officer, director, trustee, key employee, or highest compensated employee for up to the prior five tax years and who continues to receive reportable compensation from the organization is reportable as a former employee if compensation thresholds are exceeded.  Former directors and trustees receiving in excess of $10,000 and former officers, key employees, and highest compensated employees receiving in excess of $100,000 are reportable as former employees.

For more information on this topic, contact Pete Maharaja at 407-998-9000 ext. 215 or via email at pmaharaja@bkhmcpa.com.

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