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Form 990 Schedule J: Reporting Officer and Key Employee Compensation
Last updated: October 10, 2026 · Independent guide · We do not sell rankings or coverage.
Form 990 Schedule J is the compensation schedule you attach when you answer “Yes” to Form 990, Part IV, line 23. That answer comes from Part VII, Section A, lines 3, 4 and 5: you listed a former officer or highly paid employee, a listed person received more than $150,000 of reportable and other compensation, or an unrelated organization paid a listed person for services to you. Schedule J then splits each person’s pay into base, bonus, other reportable, deferred and nontaxable amounts, for your organization and for related organizations, and asks how the board set the top executive’s pay.
The rule in brief
- Who files: any Form 990 filer that answers “Yes” on Part IV, line 23. Institutional trustees are never listed on Schedule J.
- Threshold: a current listed person goes on Schedule J when Part VII columns (D), (E) and (F) total more than $150,000. Former officers, key employees and top-five employees go on it whenever they appear in Part VII.
- Period: the calendar year ending with or within your tax year, so a June 30 filer uses the prior calendar year’s Forms W-2.
- Due date: the 15th day of the 5th month after year end (May 15 for calendar-year filers), with an automatic extension on Form 8868.
- Official sources: the Schedule J instructions (Rev. December 2024), the 2025 Form 990 instructions and 26 CFR 53.4958-6, all checked October 10, 2026.
What triggers Schedule J
Part IV, line 23 is answered “Yes” when any of three Part VII questions is answered “Yes.”
| Part VII, Section A | Question | Who goes on Schedule J |
|---|---|---|
| Line 3 | Did you list any former officer, director, trustee, key employee or highest compensated employee? | Every former person listed. Former officers and employees are listed above $100,000; former directors above $10,000 for past board service. |
| Line 4 | Did any listed person receive more than $150,000 of reportable and other compensation from you and related organizations? | Each current listed person above $150,000, including every current key employee. |
| Line 5 | Did any listed person receive compensation from an unrelated organization for services to you? | That person, with the payer named in Part III. |
What the rule requires in detail
The $150,000 test
Add Part VII column (D) (reportable pay from you), column (E) (reportable pay from related organizations) and column (F) (other compensation from both). Ignore any decrease in a defined benefit plan’s actuarial value. Reportable pay for an employee is the greater of W-2 box 1 or box 5, plus any 1099-NEC box 1 or 1099-MISC box 6 amounts. Box 5 is usually larger for executives because it includes 401(k), 403(b) and 457(b) elective deferrals, according to the 2026 W-2 instructions. For clergy whose box 5 is blank or smaller, use box 1.
The $10,000 exceptions stop at Part VII
Part VII lets you skip related-organization pay under $10,000 per organization and most other compensation items under $10,000 each. Schedule J does not. Pay left out of Part VII column (E) must still appear in columns (B)(i) to (B)(iii), and items left out of column (F) must appear in column (C) or (D).
Part I: the governance questions
Part I asks whether you provided first-class or charter travel, companion travel, tax gross-ups, discretionary spending accounts, housing, club dues or personal services, and whether a written policy covered them. It also asks which methods set the CEO’s pay, such as a compensation committee or survey. Lines 4a to 4c cover severance, nonqualified retirement plans and equity pay. Lines 5 to 9 apply only to 501(c)(3), 501(c)(4) and 501(c)(29) organizations and cover revenue-based or earnings-based pay, other nonfixed payments and the initial contract exception.
Part II: the column breakdown
Each person gets row (i) for your organization and row (ii) for related organizations combined. The form states that columns (B)(i) to (B)(iii) must equal the person’s Part VII columns (D) and (E).
| Column | What goes in it | Where to pull it |
|---|---|---|
| (B)(i) Base | Nondiscretionary pay agreed in advance, such as salary | Payroll register, salary earnings codes |
| (B)(ii) Bonus and incentive | Pay for meeting performance targets, signing bonuses | Bonus earnings codes |
| (B)(iii) Other reportable | Prior-year amounts paid now, severance, change-in-control pay, vested 457(f) amounts, longevity awards, other taxable items | Remaining earnings and imputed income codes |
| (C) Retirement and deferred | Deferrals not in box 1 or 5, including employer contributions and defined benefit value changes | Plan recordkeeper, actuary |
| (D) Nontaxable benefits | Health, life and disability insurance, dependent care, education and adoption assistance | Benefits or HRIS premium reports |
| (E) Total | Sum of (B)(i) to (D) | Calculated |
| (F) Previously deferred | Part of this year’s column (B) already reported as deferred on a prior Form 990 | Prior-year workpapers |
Column (D) excludes benefits disregarded under section 4958, such as de minimis and working condition fringes and accountable plan reimbursements.
An illustrative example
These figures are an illustration only. An executive director’s 2025 Form W-2 shows box 1 of $171,000 and box 5 of $194,000; the difference is a $23,000 403(b) deferral. Payroll shows $180,000 salary, a $12,000 bonus and $2,000 of group-term life imputed income. The employer contributed $14,000 to the 403(b) and paid $16,500 of health and disability premiums.
| Column, row (i) | Illustrative amount |
|---|---|
| (B)(i) Base | $180,000 |
| (B)(ii) Bonus | $12,000 |
| (B)(iii) Other reportable | $2,000 |
| (C) Deferred | $14,000 |
| (D) Nontaxable benefits | $16,500 |
| (E) Total | $224,500 |
Columns (B)(i) to (B)(iii) total $194,000, the box 5 figure, which must match Part VII column (D). A $171,000 total means someone used box 1.
The rebuttable presumption process
Under section 4958, a disqualified person who receives an excess benefit owes a 25% excise tax, rising to 200% if it is not corrected, and managers who knowingly approve it can owe 10%, capped at $20,000 per transaction. The rebuttable presumption shifts the burden of proof to the IRS. Under 26 CFR 53.4958-6 you earn it in three steps:
- Independent approval. A board or committee with no conflicted member approves the arrangement in advance.
- Comparability data. The body relies on pay data for similar positions. An organization with gross receipts under $1 million can use data from three comparable organizations in similar communities.
- Concurrent documentation. Minutes record the terms, approval date, members present and voting, data used and any conflicted member’s actions, prepared before the later of the next meeting or 60 days after the decision.
For a discretionary bonus, no presumption arises until the amount is fixed, unless a contract caps the payment and comparability data supports the maximum total the contract allows. Our overview of board management software for nonprofits covers the minute and document features that help.
Who is exempt
Institutional trustees appear in Part VII but not on Schedule J. Part I lines 5 to 9 apply only to 501(c)(3), 501(c)(4) and 501(c)(29) organizations. Related-organization pay to a volunteer officer, director or trustee can be left out when it comes from a for-profit you do not control that provides you no paid management services. If a documented reasonable effort, such as an annual questionnaire, cannot obtain or estimate related-organization pay, you may omit it and explain on Schedule O.
Deadlines and penalties
Form 990 is due on the 15th day of the 5th month after year end and must be e-filed. An incomplete Schedule J makes the return incomplete. The 2025 instructions list a section 6652(c) penalty of $25 a day, up to the lesser of $13,000 or 5% of gross receipts, or $130 a day up to $65,000 for organizations with gross receipts over $1,309,500. A responsible person who ignores an IRS request can owe $10 a day, up to $6,500 per return.
Form 990, Part V, line 15 also asks about section 4960, which taxes remuneration above $1 million and excess parachute payments at the section 11 corporate rate of 21%. For tax years beginning after December 31, 2025, the One Big Beautiful Bill Act widened “covered employee” from the five highest-paid employees to any employee or former employee who worked for the organization in a tax year beginning after 2016. IRS Notice 2026-36 said proposed regulations are forthcoming and asked for comments by August 4, 2026.
Records you must keep
The Form 990 instructions say supporting records should usually be kept at least 3 years from the due date or filing date, whichever is later. The W-2 instructions require employers to keep Forms W-2 and W-3 for at least 4 years. For Schedule J, keep:
- W-2 and 1099 data with the earnings-code detail behind each (B) column.
- Retirement plan contribution reports, nonqualified plan statements and actuarial valuations.
- Benefit premium reports, and support for benefits you treated as disregarded.
- Committee minutes, comparability studies, contracts and conflict disclosures.
- Prior-year Schedule J workpapers, which you need for column (F).
What to set up in your payroll, HR and accounting systems
- Map earnings codes. Tag every payroll earnings code as base, bonus or other. Severance, vacation cash-outs and imputed income belong in (B)(iii).
- Report on the calendar year. Fiscal-year filers use the W-2 register for the calendar year ending within the fiscal year, not ledger salary totals.
- Pull box 1, box 5 and box 12 together. Box 12 codes D, E and G explain the gap between box 1 and box 5. Code Y shows 409A deferrals. Code DD shows the nontaxable cost of employer health coverage; use it as a cross-check for column (D) only after you confirm what your provider includes.
- Get employer contributions from the recordkeeper. Employer nonelective 401(k) and 403(b) contributions are not required on Form W-2, so column (C) needs the recordkeeper’s report and, for defined benefit or 457(f) plans, the actuary’s per-person values.
- Collect related-organization pay in HR. Send the questionnaire with the annual conflict-of-interest disclosure.
- Build tie-outs. For each person, (B)(i) to (B)(iii) must equal Part VII (D) plus (E).
Preparation software captures the split but does not classify payments for you. Thomson Reuters UltraTax CS, which sells the product, documents an officer compensation screen with base, bonus, other, deferred and nontaxable fields for the organization and related organizations, plus entry boxes for Schedule J lines 4a to 4c and a checkbox that feeds Part VII line 5. Its help page does not mention W-2 import. For the ledger side, see our guide to nonprofit accounting software; churches should also read our note on clergy pay in church fund accounting software, because box 5 is often blank for ministers.
How we researched this
We read the Schedule J form and instructions, the 2025 Form 990 instructions, the 2026 W-2 instructions, 26 CFR 53.4958-6 and 26 U.S.C. 4960, checking each on October 10, 2026. We also reviewed the top-ranking pages on this topic; none mapped W-2 boxes and payroll reports to the Part II columns, so we focused there.
Related guides
- Statement of Functional Expenses: Template and How-To
- Form 990 Schedule A: The Public Support Test Explained
- Functional Expense Allocation: Methods and Entries
Frequently asked questions
Does every nonprofit that files Form 990 need Schedule J?
No. You need it only if you answer “Yes” on Part IV, line 23, which depends on Part VII, Section A, lines 3, 4 and 5. With no former listed people, nobody above $150,000, and no pay from unrelated organizations for services to you, you skip it.
Is the $150,000 threshold based on W-2 wages alone?
No. It adds Part VII columns (D), (E) and (F), so employer retirement contributions and health benefits count. A listed person with $130,000 of W-2 wages and $25,000 of employer retirement and health benefits crosses the threshold.
Should I use W-2 box 1 or box 5 for Schedule J?
Use whichever is greater, normally box 5 because it includes elective retirement deferrals. For clergy whose box 5 is blank or lower, use box 1. Columns (B)(i) to (B)(iii) must match the figure in Part VII.
Why are my Schedule J totals higher than Part VII?
The two $10,000 exceptions apply to Part VII but not to Schedule J. Amounts left out of Part VII must be added back in Schedule J columns (B), (C) or (D), so a larger Schedule J total can be correct.
Where does deferred compensation go when it is finally paid?
In the payout year it goes in column (B), usually (B)(iii), and the portion already reported as deferred also goes in column (F).
Sources
- IRS, Instructions for Schedule J (Form 990), Rev. December 2024, page last reviewed April 30, 2026. irs.gov
- IRS, Schedule J (Form 990), Rev. December 2024. irs.gov
- IRS, 2025 Instructions for Form 990, page last reviewed April 30, 2026. irs.gov
- IRS, General Instructions for Forms W-2 and W-3 (2026), page last reviewed April 30, 2026. irs.gov
- eCFR, 26 CFR 53.4958-6, up to date as of October 7, 2026. ecfr.gov
- Legal Information Institute, 26 U.S.C. 4960, no date shown. law.cornell.edu
- Legal Information Institute, 26 U.S.C. 11, no date shown. law.cornell.edu
- IRS, Notice 2026-36, no date shown (comments due August 4, 2026). irs.gov
- Thomson Reuters (sells UltraTax CS), Officer Information, Compensation tab (990), no date shown. thomsonreuters.com
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
