Form 990 Part VII: Who to List, Columns, and Schedule J

Form 990 Part VII is the compensation disclosure section that every full Form 990 filer must complete, listing current officers, directors, and trustees regardless of pay; key employees who meet a three-part test; the five highest compensated employees over $100,000; certain former insiders; and the five highest-paid independent contractors over $100,000. Compensation is reported on a calendar-year basis across six columns that split pay between the filing organization and related organizations, plus a column for retirement contributions, insurance premiums, and other non-W-2 benefits.

Who Must Be Listed in Section A

Section A covers four groups of people, and you have to work through them in order because qualification for the later groups depends on who you’ve already captured.

Officers, Directors, and Trustees

Every current officer, director, and trustee gets listed, whether or not they received a dime of compensation. Classification turns on the person’s actual role, not their title. A director or trustee is any member of the governing body with voting power. An officer is anyone elected or appointed to manage day-to-day operations, and the IRS also requires you to list the top management official and the top financial official as officers even if your organization calls them something else.¹

Anyone who held one of these positions at any point during the tax year is listed, not just those serving on the last day. A board member who resigned in March still appears on that year’s return.

Key Employees

Key employees are non-governance staff with significant influence and substantial pay. An employee qualifies only if all three of these tests are met during the calendar year ending with or within the organization’s tax year:

Reportable compensation exceeding $150,000 from the organization and all related organizations combined.²
Powers comparable to an officer or director, or management of a segment representing 10% or more of the organization’s activities, assets, income, or expenses, or authority over 10% or more of capital spending, operating budget, or employee compensation.²
A ranking among the 20 highest-paid employees who passed the first two tests. If more than 20 clear those hurdles, only the 20 with the largest reportable compensation count as key employees.²

The responsibility test is where organizations most often stumble. A regional director who oversees a tenth of the budget qualifies even though they report to the CEO and lack ultimate authority. Look at the scope of what the person controls, not their spot on the org chart.

Five Highest Compensated Employees

After the officers, directors, trustees, and key employees are identified, you list up to five additional current employees who received more than $100,000 in reportable compensation from the organization and related organizations combined. Only employees not already captured in the earlier categories count.³ If fewer than five non-governance employees cross the $100,000 line, list only those who do.

Former Officers, Directors, and Key Employees

Part VII also reaches certain former insiders. A person who served as an officer, director, trustee, key employee, or one of the five highest compensated employees during any of the five prior tax years is listed if they received more than $100,000 in reportable compensation from the organization and related organizations during the current year.⁴ The five-year look-back is designed to prevent organizations from obscuring large payouts to departing executives.

Section B: The Top Five Independent Contractors

Section B is a separate list for the organization’s highest-paid independent contractors. You list the five highest-paid contractors who each received more than $100,000 for services during the tax year, reporting each contractor’s name, business address, type of service provided, and total compensation.³ If fewer than five crossed the threshold, list only those who did. There are no columns here for related-organization pay or other compensation. It’s just identity, service, and dollars.

The Calendar-Year Reporting Rule

This catches fiscal-year filers off guard more than almost anything else on the form. Even if the organization operates on a fiscal year, Part VII compensation is reported based on the calendar year ending with or within that fiscal year, not the fiscal year itself.⁵ An organization with a June 30, 2026 fiscal year-end reports Part VII compensation for January 1 through December 31, 2025.

The rule applies only to Part VII and Schedule J. The Statement of Functional Expenses in Part IX still uses the fiscal year.⁵ The mismatch is intentional. The IRS wants compensation figures to line up with W-2s and 1099s, which are always calendar-year documents.

How to Complete the Six Columns

Section A has six columns, labeled A through F. The columns deliberately separate pay from the filing organization from pay from related organizations, with a third bucket for benefits that don’t appear on a W-2 or 1099.

Columns A, B, and C: Identification and Role

Column A is the person’s name and title. Column B is the average hours per week devoted to the organization, with a separate line below for hours spent on related organizations. Column C holds checkboxes for the person’s role: individual trustee or director, institutional trustee, officer, key employee, highest compensated employee, or former. Check every box that applies. Someone who serves as both a director and an officer gets both boxes checked.¹

Column D: Reportable Compensation From the Filing Organization

Column D captures the amount reported on the person’s W-2 (for employees) or 1099-NEC (for independent contractors) from the filing organization only. This includes base salary, bonuses, commissions, severance, and taxable fringe benefits like personal use of a company car.¹

Column E: Reportable Compensation From Related Organizations

Column E mirrors Column D in scope but covers W-2 or 1099-NEC pay from related organizations: parent entities, subsidiaries, or brother-sister organizations under common control. If the person received less than $10,000 from a particular related organization, that amount can be left out of Part VII, though it may still need to appear on Schedule J.⁶

Column F: Estimated Other Compensation

Column F is the catch-all for compensation that doesn’t appear on a W-2 or 1099. This includes employer contributions to retirement plans (both qualified and non-qualified), employer-paid health and life insurance premiums, and other non-taxable fringe benefits from both the filing organization and related organizations.¹ The amounts here are estimates because many of these benefits don’t carry an exact dollar value tied to a specific employee until plan contributions are finalized.

Benefits that qualify as working condition fringes, such as job-related education, business use of a company phone, or employer-provided outplacement services, are generally excluded because the employee could have deducted the cost as a business expense.⁷ Only the personal-use portion of a benefit shows up in the compensation columns.

Aggregating Pay From Related Organizations

The $150,000 key employee threshold and the $100,000 highest compensated employee threshold both require you to aggregate pay from the filing organization and all related organizations. A related organization generally means a parent, subsidiary, or brother-sister entity under common control, a sponsoring organization of a VEBA, or a supporting or supported organization under Section 509(a)(3).⁶

Once a person must be listed, you generally report compensation paid by each related organization if the amount from that organization equals or exceeds $10,000. Amounts below $10,000 from a given related organization can be omitted from Part VII, but that exception does not apply to Schedule J. On Schedule J you report all related-organization compensation regardless of amount.⁶

You don’t have to list someone solely because they are a key employee of a related organization. They appear on your Part VII only if they also serve as an officer, director, trustee, key employee, or one of the five highest compensated employees of your organization.⁶

When Part VII Triggers Schedule J

Part VII stands on its own for most organizations, but certain compensation levels or arrangements pull in Schedule J, which adds detail on executive perks, severance, and the breakdown of non-taxable benefits. Schedule J is required if any of the following apply:

Any former officer, director, trustee, key employee, or highest compensated employee has to be listed in Part VII.
The combined reportable compensation and other compensation paid to any individual listed in Part VII exceeds $150,000 from the filing organization and related organizations.
An unrelated organization paid compensation to one of the filing organization’s listed individuals for services to the filing organization.⁸

Schedule J, Part I asks whether the organization provided specific benefits to any listed person: first-class or charter travel, travel for companions, health or social club dues, housing allowances or residences for personal use, tax gross-up payments, discretionary spending accounts, and personal services like chefs, bodyguards, or personal trainers.⁹ For each benefit, you report who received it and whether it was treated as taxable compensation, with an explanation in Part III for anything not treated as taxable.

Family and Business Relationships

Part VII does not sit in isolation. The people listed there feed directly into Part VI, Line 2, which asks whether any current officers, directors, trustees, or key employees reported in Part VII had a family or business relationship with another person listed in Part VII. If the answer is yes, the organization identifies the individuals and describes the relationship on Schedule O.¹ A brief description such as “family relationship” or “business relationship” is sufficient without additional detail.

Related-party transactions and compensation decisions involving family members are among the most common triggers for IRS scrutiny of exempt organizations. Failing to disclose a relationship that is later discovered looks far worse than reporting it upfront.

What Happens If You Get Part VII Wrong

Everything reported in Part VII becomes a public record and will be visible to donors, journalists, and watchdog groups indefinitely. The numbers also carry real consequences if the return is late or incomplete, or if the compensation itself is excessive.

For organizations with gross receipts under $1,208,500, the late or incomplete-return penalty is $20 per day, up to the lesser of $12,000 or 5% of gross receipts. Organizations above that threshold face $120 per day, up to $60,000.¹⁰ These penalties apply to incomplete returns, and submitting Part VII with blank compensation columns or missing individuals counts as a failure to include required information. An organization that missed a deadline or filed an incomplete return can request abatement for reasonable cause by submitting a written statement under penalty of perjury explaining what prevented timely filing, how it exercised ordinary business care, and what steps it has taken to prevent a recurrence.¹¹

Failing to file at all for three consecutive years triggers automatic revocation of exempt status on the due date of the third missed return. The IRS cannot reverse a proper automatic revocation; the organization must reapply from scratch.¹²

Beyond filing penalties, the dollar figures in Part VII can draw scrutiny under the intermediate sanctions rules in Section 4958. An excess benefit transaction, meaning paying an insider more than the value of what they provided, triggers an excise tax on the person who received the benefit of 25% of the excess amount, rising to an additional 200% if not corrected within the allowed period. Organization managers who knowingly approved the transaction face a separate 10% tax, capped at $20,000 per transaction.¹³ Organizations that set compensation through a disinterested authorized body, rely on comparability data, and document the basis for the decision at the time it was made can establish a rebuttable presumption that the compensation was reasonable, shifting the burden to the IRS to prove otherwise.¹⁴

1
Internal Revenue Service. 2025 Instructions for Form 990 Return of Organization Exempt From Income Tax
2
Internal Revenue Service. Exempt Organization Annual Reporting Requirements – Key Employee Compensation Reporting on Form 990 Part VII
3
Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Form 990 Part VII and Schedule J – Whose Compensation Must Be Reported in Part VII Form 990
4
Internal Revenue Service. Form 990 Part VII – Reporting Executive Compensation – Individuals Included
5
Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Compensation Calendar Year Reporting Required
6
Internal Revenue Service. Exempt Organization Annual Reporting Requirements – Reporting Compensation Paid by Related Organization on Form 990
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Internal Revenue Service. Employers Tax Guide to Fringe Benefits
8
Internal Revenue Service. Exempt Organization Annual Reporting Requirements – Filing Requirements for Schedule J Form 990
9
Internal Revenue Service. Instructions for Schedule J (Form 990)
10
Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Filing Procedures – Late Filing of Annual Returns
11
Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Filing Procedures – Abatement of Late Filing Penalties
12
Internal Revenue Service. Automatic Revocation of Exemption
13
Office of the Law Revision Counsel. 26 USC 4958 – Taxes on Excess Benefit Transactions
14
eCFR. 26 CFR 53.4958-6 – Rebuttable Presumption That a Transaction Is Not an Excess Benefit Transaction