2008 Instructions For Schedule J (Form 990) Page 4
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6All current key employees
For certain kinds of employees,
Form 1099-MISC, issued to the person
TIP
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listed on Form 990, Part VII,
such as certain members of the
for the calendar year ending with or
Section A must also be reported
clergy and religious workers
within the organization’s tax year.
on Schedule J, Part II, because their
who are not subject to social security
Report a reasonable estimate if actual
reportable compensation, by
and Medicare taxes as employees, box
numbers are not readily available.
definition, exceeds $150,000.
5 of Form W-2 may be blank. In this
For this purpose, deferred
case, the amount required to be
compensation is compensation that is
Do not list any individuals in
reported in box 1 of Form W-2 for the
earned or accrued in, or is attributable
Schedule J, (Form 990), Part II that are
listed persons must be reported, as
to, one year and deferred to a future
not listed on Form 990, Part VII,
appropriate, in columns (B)(i), (B)(ii),
year for any reason, whether or not
Section A. Do not list in Part II
and (B)(iii).
funded, vested, or subject to a
management companies or other
substantial risk of forfeiture. This
Column (B)(i). Report the listed
organizations providing services to the
includes earned but unpaid incentive
person’s base compensation that was
organization. Do not list highest
compensation deferred pursuant to a
included in box 5 of Form W-2 (or in
compensated independent contractors
deferred compensation plan. Note that
box 1, if no compensation is reported
reported on Form 990, Part VII, Section
different rules may apply for
for that person in box 5), or box 7 of
B.
determining whether an arrangement
Form 1099-MISC, issued to the person.
For each individual listed, report
provides for deferred compensation for
Base compensation means
compensation from the organization on
purposes of Internal Revenue Code
non-discretionary payments to a person
row (i), and compensation from all
provisions such as sections 83, 409A,
agreed upon in advance, contingent
related organizations on row (ii).
457(f), or 3121(v).
only on the payee’s performance of
Related organizations are explained in
agreed-upon services (such as salary
Do not report deferred compensation
the instructions for Schedule R (Form
or fees).
in column (C) before it is earned or
990), Related Organizations and
accrued under the principles described
Column (B)(ii). Report the listed
Unrelated Partnerships. Any type and
below. For this purpose, deferred
person’s bonus and incentive
amount of reportable compensation
compensation is generally treated as
compensation that is included in box 5
from related organizations that was
earned or accrued in the year that
of Form W-2, (or in box 1, if no
excluded from Form 990, Part VII,
services are rendered, except when
compensation is reported for that
Section A, pursuant to the
entitlement to payment is contingent on
person in box 5), or box 7 of Form
$10,000-per-related-organization
satisfaction of specified performance
1099-MISC, issued to the person.
exception must be included on
criteria (other than mere longevity of
Examples include payments based on
Schedule J, Part II, columns B(i), B(ii),
service) under the deferred
satisfaction of a performance target
and B(iii). If there is no compensation to
compensation plan. If the payment of
(other than mere longevity of service),
report in a particular column, enter “-0-.”
an amount of deferred compensation
and payments at the beginning of a
If the organization answered “Yes” to
requires the employee to perform
contract before services are rendered
Form 990, Part VII, Section A, line 5,
services for a period of time, the
(for example, signing bonus).
report such compensation from the
amount is treated as accrued or earned
Column (B)(iii). Report all other
unrelated organization as if it were
ratably over the course of the service
payments to the listed person included
received from the organization, and
period, even though the amount is not
in box 5 of Form W-2, (or in box 1, if no
report the name of the unrelated
funded and may be subject to a
compensation is reported for that
organization in Part III.
substantial risk of forfeiture until the
person in box 5), or box 7 of Form
service period is completed.
For a table showing how and where
1099-MISC issued to the person but
to report certain types of compensation
Report deferred compensation for
not reflected in columns (B)(i) or (B)(ii).
on Schedule J, (Form 990) see the
each listed person regardless of
Examples may include, but are not
instructions to line 1 of Form 990, Part
whether such compensation is deferred
limited to, current-year payments of
VII, Section A.
as part of a deferred compensation
amounts earned in a prior year,
plan that is administered by a separate
payments under a severance plan,
Any type and amount of other
trust, as long as the plan is established,
payments under an arrangement
compensation that was excluded from
sponsored, or maintained by or for the
providing for payments upon the
Form 990, Part VII, Section A, pursuant
organization or a related organization
change in ownership or control of the
to the $10,000-per-item exception for
for the benefit of the listed person.
organization or similar transaction, and
certain other compensation items must
awards based on longevity of service.
be included in Schedule J, Part II,
The examples below illustrate when
columns (C) or (D).
deferred compensation is considered
Column (C). Report all current-year
earned or accrued, as well as when
deferrals of compensation for the listed
For purposes of these instructions, a
and how it is to be reported. In these
person under any retirement or other
listed person is a person required to be
examples, assume that the amounts
deferred compensation plan, whether
listed in Part II.
deferred are not reported on Form W-2,
qualified or nonqualified, that is
If there are more individuals to report
box 5 prior to the year during which the
established, sponsored, or maintained
in Part II than space available, report
amounts are paid.
by or for the organization or a related
the additional individuals in Part I of
organization. Report as deferred
Example 1. An executive
Schedule J-1 (Form 990). Use as many
compensation the annual increase in
participates in Organization A’s
Schedules J-1 (Form 990) as needed.
actuarial value, if any, of a defined
nonqualified deferred compensation
Column (A). State the name of each
benefit plan, but do not report earnings
plan. Under the terms of the plan
person who must be listed in Part II.
accrued on deferred amounts in a
beginning January 1 of calendar year 1,
defined contribution plan. Do not report
she earns for each year of service an
Column (B). Amounts reported on
in column (C) any payments to a listed
amount equal to 2% of her base salary
Form 990, Part VII, Section A, columns
person of compensation that are
of $100,000 for that year. These
(D) and (E), must be broken out
included in box 5 of Form W-2 (or in
additional amounts are deferred and
between columns (B)(i), (B)(ii), and
box 1, if no compensation is reported
are not vested until the executive has
(B)(iii).
for that person in box 5), or box 7 of
completed 3 years of service with
-4-
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