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                                                                                                Department of the Treasury
                                                                                                Internal Revenue Service
2023

Instructions for Schedule J 

(Form 990)

Compensation Information

Section references are to the Internal Revenue Code unless        organization and its related organizations. Part I, lines 5 
otherwise noted.                                                  through 9, must be completed only by section 501(c)(3), 
                                                                  section 501(c)(4), and section 501(c)(29) organizations.
Future Developments                                                 Part II requires detailed compensation information for 
                                                                  individuals for whom the organization answered “Yes” on 
For the latest information about developments related to          Form 990, Part IV, line 23. Not all persons listed on Form 990, 
Schedule J (Form 990) and its instructions, such as               Part VII, Section A, will necessarily be listed in Schedule J, 
legislation enacted after they were published, go to IRS.gov/     Part II.
Form990.
                                                                    Part III is used to provide explanations of answers as 
Reminder                                                          required in Part I or II.
Form 1099-NEC and nonemployee compensation re-                      Unless stated otherwise, all questions in this schedule 
porting. Beginning with tax year 2020, Form 1099-NEC,             pertain to activity during the calendar year ending with or 
Nonemployee Compensation, is used to report nonemployee           within the organization's tax year.
compensation. Accordingly, where the Form 990 references 
reporting amounts of compensation from Form 1099-MISC,            Part I. Questions Regarding 
Miscellaneous Income, be sure to include nonemployee 
compensation from box 1 of Form 1099-NEC. See the                 Compensation
instructions for additional information.                          For purposes of Part I, a listed person is a person listed on 
                                                                  Form 990, Part VII, Section A.
General Instructions                                              Line 1. Report information regarding certain benefits (if any) 
Note. Terms in bold are defined in the Glossary of the            provided to persons listed on Form 990, Part VII, Section A, 
Instructions for Form 990, Return of Organization Exempt          line 1a.
From Income Tax.                                                    Line 1a. Check the appropriate box(es) if the organization 
Purpose of Schedule                                               provided any of the listed benefits to any of the persons listed 
                                                                  on Form 990, Part VII, Section A, regardless of whether such 
Schedule J (Form 990) is used by an organization that files       benefits are reported as compensation in box 1 or box 5 of 
Form 990 to report compensation information for certain           Form W-2, Wage and Tax Statement; box 6 of Form 
officers directors, , individual trustees key employees, ,        1099-MISC; or box 1 of Form 1099-NEC. For each of the 
and highest compensated employees, and information on             listed benefits provided to or for a listed person, provide in 
certain compensation practices of the organization.               Part III the following information.
Who Must File                                                     • The type of benefit.
                                                                  • The listed person who received the benefit, or a 
An organization that answered “Yes” on Form 990, Part IV,         description of the types (for example, all directors) and 
line 23, must complete Schedule J. Do not file Schedule J for     number of listed persons that received the benefit.
institutional trustees.                                           • Whether the benefit, or any part of it, was treated as 
If an organization isn't required to file Form 990 but            taxable compensation to the listed person.
chooses to do so, it must file a complete return and provide        First-class travel refers to any travel on a passenger 
all of the information requested, including the required          airplane, train, or boat with first-class seats or 
schedules.                                                        accommodations by a listed person or companion if any 
                                                                  portion of the cost above the lower-class fare is paid by the 
                                                                  organization. First-class travel doesn't include intermediate 
Specific Instructions                                             classes between first class and coach, such as business 
                                                                  class on commercial airlines. Bump-ups to first class free of 
Part I asks questions regarding certain compensation              charge or as a result of using frequent flyer benefits, or similar 
practices of the organization. Part I generally pertains to all   arrangements that are at no additional cost to the 
officers directors trustees, , , and employees of the             organization, can be disregarded.
organization listed on Form 990, Part VII, Section A, 
regardless of whether the organization answered “Yes” to            Charter travel refers to travel on an airplane, train, or boat 
line 23 of Form 990, Part IV, for all such individuals. However,  under a charter or rental arrangement. Charter travel also 
only the organizations that are described in Who Must File,       includes any travel on an airplane or boat that is owned or 
earlier, must complete Part I. Part I, lines 1, 2, 3, 7, 8, and 9 leased by the organization.
require reporting on the compensation practices of the filing       Travel for companions refers to any travel of a listed 
organization, but not of related organizations. Lines 4           person's guest not traveling primarily for bona fide business 
through 6 require information regarding both the filing           purposes of the organization. It also refers to any travel of a 

Jul 10, 2023                                             Cat. No. 51525Q

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listed person's family members, whether or not for bona fide            including the organization's top management official (all 
business purposes.                                                      referred to as “top management official”). An organization can 
   Tax indemnification and gross-up payments refer to the               answer “Yes” if it checked the “Discretionary spending 
organization's payment or reimbursement of any tax                      account” box on line 1a and required substantiation of 
obligations of a listed person.                                         expenses under the rules for accountable plans for all listed 
                                                                        benefits on line 1a other than for discretionary spending 
   Discretionary spending account refers to an account or               accounts.
sum of money under the control of a listed person with 
respect to which the person isn’t accountable to the                    Line 3. Check the appropriate box(es) to indicate which 
organization under an accountable plan, whether or not                  methods, if any, the organization used to establish the 
actually used for any personal expenses. Accountable plans              compensation of the organization's top management 
are discussed in Accountable plan amounts, later (under the             official. If the organization relied on a compensation 
Part II, column (D), instructions).                                     consultant that used a method described in line 3 to help 
   Housing allowance or residence for personal use refers to            determine compensation for the top management official, the 
any payment for, or provision of, housing by the organization           organization may check the box for that method in line 3. Do 
for personal use by a listed person, including a ministerial            not check any box(es) for methods used by a related 
housing or parsonage allowance.                                         organization to establish the filing organization's 
                                                                        compensation of the filing organization's top management 
   Payments for business use of personal residence refers to            official. Explain in Part III if the organization relied on a 
any payment by the organization for the use of all or part of a         related organization that used one or more of the methods 
listed person's residence for any purpose of the organization.          described next to establish the top management official's 
   Health or social club dues or initiation fees refers to any          compensation.
payment of dues by the organization for the membership of a             Compensation committee refers to a committee of the 
listed person in a health or fitness club or a social or                organization's governing body responsible for determining 
recreational club, whether or not such clubs are tax exempt. It         the top management official's compensation package, 
doesn't include membership fees for an organization                     whether or not the committee has been delegated the 
described in section 501(c)(3) or section 501(c)(6) unless              authority to make an employment agreement with the top 
such organization provides health, fitness, or recreational             management official on behalf of the organization. The 
facilities available for the regular use of a listed person.            compensation committee can also have other duties.
Health club dues don't include provision by the organization 
of an on-premises athletic facility described in section 132(j)         Independent compensation consultant refers to a person 
(4), or provision by a school of an athletic facility available for     outside the organization who advises the organization 
general use by its students, faculty, and employees. Dues               regarding the top management official's compensation 
include the entrance fee, periodic fees, and amounts paid for           package, holds the official out to the public as a 
use of such facilities.                                                 compensation consultant, performs valuations of nonprofit 
                                                                        executive compensation on a regular basis, and is qualified 
   Personal services refers to any services for the personal            to make valuations of the type of services provided. The 
benefit of a listed person or the family or friends of a listed         consultant is independent if the consultant does not have a 
person, whether provided regularly (on a full-time or part-time         family relationship or business relationship with the top 
basis) or as needed, whether provided by an employee of                 management official, and if a majority of the appraisals are 
the organization or independent contractor (and whether                 performed for persons other than the organization, even if the 
the independent contractor is an individual or an                       consultant's firm also provides tax, audit, and other 
organization). They include, but aren't limited to, services of a       professional services to the organization.
babysitter, bodyguard, butler, chauffeur, chef, concierge or 
other person who regularly runs non-incidental personal                 Form 990 of other organizations refers to compensation 
errands, escort, financial planner, handyman, landscaper,               information reported on a Form 990 series return of similarly 
lawyer, maid, masseur/masseuse, nanny, personal trainer,                situated organizations, and includes Forms 990; 990-EZ, 
personal advisor or counselor, pet sitter, physician or other           Short Form Return of Organization Exempt From Income Tax; 
medical specialist, tax preparer, and tutor for nonbusiness             and 990-PF, Return of Private Foundation.
purposes. Personal services don't include services provided             Written employment contract refers to one or more recent 
to all employees on a nondiscriminatory basis under a                   or current written employment agreements to which the top 
qualified employee benefit plan.                                        management official and another organization are or were 
Line 1b. If the organization provided any of the benefits               parties, written employment agreements involving similarly 
listed in line 1a to one or more listed persons, answer “Yes” if        situated top management officials with similarly situated 
the organization followed a written policy regarding the                organizations, or written employment offers to the top 
payment, provision, or reimbursement of all such benefits to            management official from other organizations dealing at 
listed persons. If the organization didn't follow a written policy      arm's length.
for payment, provision, or reimbursement of any listed                  Compensation survey or study refers to a study of top 
benefits, explain in Part III who determined the organization           management official compensation or functionally 
would provide such benefits and the decision-making                     comparable positions in similarly situated organizations.
process.
                                                                        Approval by board or compensation committee refers to 
Line 2. Answer “Yes” if the organization required                       the ultimate decision by the governing body or compensation 
substantiation of all expenses or benefits listed on line 1a, in        committee on behalf of the organization regarding whether to 
accordance with the rules for accountable plans discussed               enter into an employment agreement with the top 
in Accountable plan amounts, later (under the Part II, column           management official, and the terms of such agreement.
(D), instructions), before reimbursing or allowing all such 
expenses incurred by any directors trustees,    , and officers,         Line 4. List in Part III the names of listed persons paid 
                                                                        amounts during the year by the filing organization or a 

                                                                    -2-                2023 Instructions for Schedule J (Form 990)

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related organization under any arrangement described in be paid a bonus equal to x% of B's net revenues from a
lines 4a through 4c, and report the amounts paid during the particular department operated by B for a specified period of
year to each such listed person. Also describe in Part III the time. This arrangement is a payment contingent on revenues
terms and conditions of any arrangement described in lines of the organization, and must be reported on line 5,
4a through 4c in which one or more listed persons regardless of whether the payment is contingent on achieving
participated during the year, regardless of whether any a certain revenue target. However, if instead the bonus
payments to the listed person were made during the year. payment is a specific dollar amount (for instance, $5,000) to
Line 4a. Answer “Yes” if a listed person received a be paid only if a gross revenue or net revenue target of the
severance or change-of-control payment from the department is achieved, the payment isn't contingent on
organization or a related organization. A severance revenues of the organization for this purpose.
payment is a payment made if the right to the payment is Line 6. Answer “Yes” if the organization paid or accrued with
contingent upon the person's severance from service in respect to a listed person any compensation contingent
specified circumstances, such as upon an involuntary upon and determined in whole or in part by the net earnings
separation from service or under a separation or termination of one or more activities of the organization or a related
agreement voluntarily entered into by the parties. Payments organization, or by the net earnings of the organization or a
under a change-of-control arrangement are made in related organization as a whole. Describe such arrangements
connection with a termination or change in the terms of in Part III.
employment resulting from a change in control of the
organization. Treat as a severance payment any payment to a Example. A, a listed person, is an employee of
listed person by the organization or a related organization in organization B. As part of A's compensation package, A is to
satisfaction or settlement of a claim for wrongful termination be paid a bonus equal to x% of B's net earnings for a
or demotion. specified period of time. This arrangement is a payment
Line 4b. Answer “Yes” if a listed person participated in or contingent on net earnings of the organization for line 6
received payment from any supplemental nonqualified purposes, regardless of whether the payment is contingent
retirement plan established, sponsored, or maintained by or on achieving a certain net earnings target. However, if
for the organization or a related organization. A instead the bonus payment is a specific dollar amount to be
supplemental nonqualified retirement plan is a nonqualified paid only if a net earnings target is achieved, the payment
retirement plan that isn't generally available to all employees isn't contingent on the net earnings of the organization for this
but is available only to a certain class or classes of purpose.
management or highly compensated employees. For this Line 7. Answer “Yes” if the organization provided any
purpose, include as a supplemental nonqualified retirement non-fixed payments, not described on lines 5 and 6, for a
plan a plan described in section 457(f) (but don't include a listed person. Describe such arrangements in Part III. A fixed
plan described in section 457(b)) and a split-dollar life payment is an amount of cash or other property specified in
insurance plan. the contract, or determined by a fixed formula specified in the
Line 4c. Answer “Yes” if a listed person participated in or contract, which is to be paid or transferred in exchange for
received payment from the organization or a related the provision of specified services or property. A fixed formula
organization of any equity-based compensation (such as can incorporate an amount that depends upon future
stock, stock options, stock appreciation rights, restricted specified events or contingencies, provided that no person
stock, or phantom or shadow stock), or participated in or exercises discretion when calculating the amount of a
received payment from any equity compensation plan or payment or deciding whether to make a payment, such as a
arrangement sponsored by the organization or a related bonus. Amounts paid or accrued to any listed person that
organization, whether the compensation is determined by aren't fixed amounts as defined earlier are non-fixed
reference to equity in a partnership, limited liability company, payments. For example, any amount paid to a person under a
or corporation. Equity-based compensation doesn't include reimbursement arrangement where discretion is exercised by
compensation contingent on the revenues or net earnings of any person as to the amount of expenses incurred or
the organization, which are addressed by lines 5 and 6 later. reimbursed is a non-fixed payment. See Regulations section
Example. A, a listed person, is an employee of 53.4958-4(a)(3).
organization B. B owns an interest in C, a for-profit subsidiary Exception. Amounts payable under a qualified pension,
that is a stock corporation. As part of A's compensation profit-sharing, or stock bonus plan under section 401(a) or
package, B provides restricted stock in C to A. This is an under an employee benefit program that is subject to and
equity-based compensation arrangement for purposes of satisfies coverage and nondiscrimination rules under the
line 4c. The same would be true if C were a partnership or Internal Revenue Code (for example, sections 127 and 137),
limited liability company and B provided A a profits interest or other than nondiscrimination rules under section 9802, are
capital interest in C. treated as fixed payments for purposes of line 7, regardless
of the organization's discretion with respect to the plan or
Line 5. Answer “Yes” if the organization paid or accrued with program. The fact that a person contracting with the
respect to a listed person any compensation contingent organization is expressly granted the choice to accept or
upon and determined in whole or in part by the revenues reject any economic benefit is disregarded in determining
(gross or net) of one or more activities of the organization or a whether the benefit constitutes a fixed payment for purposes
related organization, or by the revenues (gross or net) of of line 7.
the organization or a related organization as a whole. For this
purpose, net revenues means gross revenues less certain Line 8. Answer “Yes” if any amounts from the organization
expenses, but doesn't mean net income or net earnings. reported on Form 990, Part VII, were paid under a contract
Describe such arrangements in Part III. subject to the initial contract exception described in
Regulations section 53.4958-4(a)(3). Describe such
Example. A, a listed person, is a physician employed by arrangements in Part III. Fixed payments made under an
organization B. As part of A's compensation package, A is to

2023 Instructions for Schedule J (Form 990) -3-

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initial contract aren't subject to section 4958. An initial            included on Schedule J, Part II, columns (B)(i), (B)(ii), and (B)
contract is a binding written contract between the                     (iii). If there is no compensation to report in a particular 
organization and a person who wasn't a disqualified person             column, enter “-0-.”
(within the meaning of section 4958(f)(1)) with respect to the 
organization immediately prior to entering into the contract.          If the organization answered “Yes” to Form 990, Part VII, 
See the instructions for line 7 for the definition of fixed            Section A, line 5, report such compensation from the 
payments.                                                              unrelated organization as if it were received from the 
                                                                       organization, and enter the name of the unrelated 
Line 9. Answer “Yes” if the payments described in line 8               organization in Part III.
were made under an initial contract that was reviewed and 
approved by the organization following the rebuttable                  For a table showing how and where to report certain types 
presumption procedure described in Regulations section                 of compensation on Schedule J, see the instructions for line 1 
53.4958-6(c). For more information on the initial contract             of Form 990, Part VII, Section A.
exception and rebuttable presumption procedure, see                    Any type and amount of other compensation that was 
Appendix G. Section 4958 Excess Benefit Transactions in the            excluded from Form 990, Part VII, Section A, under the 
Instructions for Form 990.                                             $10,000-per-item exception for certain other compensation 
                                                                       items, must be included in Schedule J, Part II, column (C) or 
Part II. Officers, Directors, Trustees,                                (D).
Key Employees, and Highest                                             For purposes of Part II, a listed person is a person required 
Compensated Employees                                                  to be listed in Part II.
Enter information for certain individuals listed on Form 990,          Column (A). Enter the name and title of each person who 
Part VII, Section A, as described below. Report                        must be listed in Part II.
compensation for the calendar year ending with or within               Column (B). Amounts reported on Form 990, Part VII, 
the organization's tax year paid to or earned by the following         Section A, columns (D) and (E), must be broken out between 
individuals.                                                           columns (B)(i), (B)(ii), and (B)(iii).
• Each of the organization's former officers, former 
directors, former trustees, former key employees, and                      For certain kinds of employees, such as certain 
former five highest compensated employees listed on                    TIP members of the clergy and religious workers who 
Form 990, Part VII, Section A.                                             aren't subject to social security and Medicare taxes 
• Each of the organization's current officers, directors,              as employees, the amount in box 5 of Form W-2 may be 
trustees, key employees, and five highest compensated                  blank or less than the amount in box 1 of Form W-2. In this 
employees for whom the sum of Form 990, Part VII,                      case, the amount required to be reported in box 1 of Form 
Section A, columns (D), (E), and (F) (disregarding any                 W-2 for the listed persons must be reported, as appropriate, 
decreases in the actuarial value of defined benefit plans) is          in columns (B)(i), (B)(ii), and (B)(iii).
greater than $150,000.
                                                                       Column (B)(i). Enter the listed person's base 
• Each of the organization's current and former officers, 
                                                                       compensation included in box 1 or box 5 (whichever is 
directors, trustees, key employees, and five highest 
                                                                       greater) of Form W-2, box 6 of Form 1099-MISC, or box 1 of 
compensated employees who received or accrued 
                                                                       Form 1099-NEC issued to the person. Base compensation 
compensation from any unrelated organization or individual 
                                                                       means nondiscretionary payments to a person agreed upon 
for services rendered to the filing organization, as reported on 
                                                                       in advance, contingent only on the payee's performance of 
line 5 of Form 990, Part VII, Section A. List in Part III the name 
                                                                       agreed-upon services (such as salary or fees).
of each unrelated organization that provided compensation to 
such persons, the type and amount of compensation it paid              Column (B)(ii).     Enter the listed person's bonus and 
or accrued, and the person receiving or accruing such                  incentive compensation included in box 1 or box 5 (whichever 
compensation, as explained in the instructions for Form 990,           is greater) of Form W-2, box 6 of Form 1099-MISC, or box 1 
Part VII, Section A, line 5.                                           of Form 1099-NEC issued to the person. Examples include 
                                                                       payments based on satisfaction of a performance target 
        All current key employees listed on Form 990, Part             (other than mere longevity of service), and payments at the 
TIP     VII, Section A, must also be reported on Schedule J,           beginning of a contract before services are rendered (for 
        Part II, because their reportable compensation, by             example, signing bonus).
definition, exceeds $150,000.                                          Column (B)(iii).    Enter all other payments issued to the 
                                                                       listed person and included in box 1 or box 5 (whichever is 
  Do not list any individuals in Schedule J, Part II, that aren't      greater) of Form W-2, box 6 of Form 1099-MISC, or box 1 of 
listed on Form 990, Part VII, Section A. Do not list in Part II        Form 1099-NEC but not reflected in column (B)(i) or (B)(ii). 
management companies or other organizations providing                  Examples include, but aren't limited to, current-year 
services to the organization. Do not list highest compensated          payments of amounts earned in a prior year, payments under 
independent contractors reported on Form 990, Part VII,                a severance plan, payments under an arrangement providing 
Section B.                                                             for payments upon the change in ownership or control of the 
                                                                       organization or similar transaction, deferred amounts and 
  For each individual listed, enter compensation from the 
                                                                       earnings or losses in a nonqualified defined contribution plan 
organization on row (i), and compensation from all related 
                                                                       subject to section 457(f) when they become substantially 
organizations on row (ii). Related organizations are 
                                                                       vested, and awards based on longevity of service.
explained in the Glossary in the Instructions for Form 990. 
Any type and amount of reportable compensation from                    Column (C). Enter all current-year deferrals of 
related organizations that was excluded from Form 990, Part            compensation for the listed person under any retirement or 
VII, Section A, column (E), under the                                  other deferred compensation plan, whether qualified or 
$10,000-per-related-organization exception, must be                    nonqualified, that is established, sponsored, or maintained by 

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or for the organization or a related organization. Report as Example 2. Under the terms of the executive’s
deferred compensation the annual increase or decrease in employment contract with Organization B beginning July 1 of
actuarial value, if any, of a defined benefit plan, but don't calendar year 1, an executive is entitled to receive $50,000 of
report earnings or losses accrued on deferred amounts in a additional compensation after completing 5 years of service
defined contribution plan. Do not enter in column (C) any with the organization. The compensation is contingent only
payments of compensation included in box 1 or box 5 on the longevity of service. The $50,000 is treated as
(whichever is greater) of Form W-2, box 6 of Form accrued or earned ratably over the course of the 5 years of
1099-MISC, or box 1 of Form 1099-NEC issued to the listed service, even though it isn't funded or vested until the
person for the calendar year ending with or within the executive has completed the 5 years. Organization B makes
organization's tax year. Enter a reasonable estimate if actual a payment of $50,000 to the executive in calendar year 6.
numbers aren't readily available. Organization B enters $5,000 of deferred compensation in
For this purpose, deferred compensation is compensation column (C) for calendar year 1 and $10,000 for each of
that is earned or accrued in, or is attributable to, 1 year and calendar years 2 through 5. For calendar year 6, Organization
deferred for any reason to a future year, whether or not B enters $50,000 in column (B)(iii) and $45,000 in column
funded, vested, or subject to a substantial risk of forfeiture. (F).
This includes earned but unpaid incentive compensation Example 3. An executive participates in Organization C's
deferred under a deferred compensation plan. But don't incentive compensation plan. The plan covers calendar years
report in column (C) a deferral of compensation that causes 1 through 5. Under the terms of the plan, the executive is
an amount to be deferred from the calendar year ending with entitled to earn 1% (0.01) of Organization C's total
or within the tax year to a date that isn't more than 2 /1 2 productivity savings for each year during which Organization
months after the end of the calendar year ending with or C's total productivity savings exceed $100,000. Earnings
within the tax year. Note that different rules can apply for under the incentive compensation plan will be payable in year
determining whether an arrangement provides for deferred 6, to the extent funds are available in a certain “incentive
compensation for purposes of Internal Revenue Code compensation pool.” For years 1 and 2, Organization C's total
provisions such as section 83, 409A, 457(f), or 3121(v). productivity savings are $95,000. For each of years 3, 4, and
Do not report deferred compensation in column (C) before 5, Organization C's total productivity savings are $120,000.
it is earned or accrued under the principles described. For Accordingly, the executive earns $1,200 of incentive
this purpose, deferred compensation is generally treated as compensation in each of years 3, 4, and 5. The executive
earned or accrued in the year that services are rendered, does not earn anything under the incentive compensation
except when entitlement to payment is contingent on plan in years 1 and 2 because the relevant performance
satisfaction of specified organizational goals or performance criteria weren't met in those years. Although the amounts
criteria (other than mere longevity of service) under the earned under the plan for years 3, 4, and 5 are dependent
deferred compensation plan. If the payment of an amount of upon there being a sufficient incentive compensation pool
deferred compensation requires the employee to perform from which to make the payment, Organization C enters
services for a period of time, the amount is treated as $1,200 of deferred compensation in column (C) in years 3, 4,
accrued or earned ratably over the course of the service and 5. In year 6, Organization C pays $3,600 attributable to
period, even though the amount isn't funded and may be years 3, 4, and 5, and enters $3,600 in column (B)(ii) and
subject to a substantial risk of forfeiture until the service $3,600 in column (F).
period is completed. Example 4. A new executive participates in Organization
Report deferred compensation for each listed person D's nonqualified defined benefit plan, under which the
regardless of whether such compensation is deferred as part executive will receive a fixed dollar amount per year for a
of a deferred compensation plan that is administered by a fixed number of years beginning with the first anniversary of
separate trust, as long as the plan is established, sponsored, retirement. The benefits don't vest until the executive serves
or maintained by or for the organization or a related for 15 years with Organization D. Because the benefits
organization for the benefit of the listed person. should be treated as accruing ratably over the 15 years, for
year 1 the actuarial value of 1/15th of the benefits is reported
The following examples illustrate when deferred as deferred compensation in column (C). For year 2, the
compensation is considered earned or accrued, as well as actuarial value of 2/15ths of the benefits minus last year's
when and how it is to be reported. In these examples, value of 1/15th is reported as deferred compensation in
assume that the amounts deferred aren't reported in box 1 or column (C). For year 3, the actuarial value of 3/15ths of the
box 5 of Form W-2, prior to the year during which the benefits minus last year's value of 2/15ths is reported, and so
amounts are paid. on.
Example 1. An executive participates in Organization A's Column (D). Nontaxable benefits are benefits specifically
nonqualified deferred compensation plan. Under the terms of excluded from taxation under the Internal Revenue Code.
the plan beginning January 1 of calendar year 1, the Report the value of all nontaxable benefits provided to or for
executive earns for each year of service an amount equal to the benefit of the listed person, other than benefits
2% (0.02) of their base salary of $100,000 for that year. disregarded for purposes of section 4958 under Regulations
These additional amounts are deferred and aren't vested until section 53.4958-4(a)(4). Common nontaxable and section
the executive has completed 3 years of service with 4958 disregarded benefits, referred to as fringe benefits
Organization A. In year 4, the deferred amounts for years 1 below, are discussed in detail beginning on this page.
through 3 are paid to the executive. For each of the years 1
through 3, Organization A enters $2,000 of deferred Depending on the type of benefit, fringe benefits can be
compensation for the executive in column (C). For year 4, provided only to employees or also to persons other than
Organization A enters $6,000 in column (B)(iii) and $6,000 in employees, such as directors trustees, , and independent
column (F). contractors. Fringe benefits can be entirely personal in
nature or can combine personal and business elements.

2023 Instructions for Schedule J (Form 990) -5-

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The taxability of a benefit can depend upon the form in value of the use for business purposes properly accounted
which it is provided. For example, a cash housing allowance for is a working condition fringe benefit. Cell phones provided
is ordinarily reportable in box 5 of Form W-2. Under section to employees primarily for business purposes (other than
119, housing provided for the convenience of the employer compensation) are a working condition fringe benefit; in such
can be excludable, and the fair rental value of in-kind housing case, the employee's personal use is a de minimis fringe.
provided to certain school employees can be part taxable See Notice 2011-72, 2011-38 I.R.B. 407. See Pub. 587,
and part excludable, depending on facts and circumstances. Business Use of Your Home, for special rules regarding
Taxable benefits must be reported on Form W-2. deductibility of home expenses for business use.
The following benefits provided for a listed person must be Accountable plan amounts. An accountable plan is a
reported in column (D) to the extent not reported as taxable reimbursement or other expense allowance arrangement that
compensation in box 1 or box 5 of Form W-2, box 6 of Form meets each of the following rules.
1099-MISC, or box 1 of Form 1099-NEC. 1. The expenses covered under the plan must be
• Value of housing provided by the employer, except to the reasonable employee business expenses that are deductible
extent such value is a working condition fringe. under section 162 or other provisions of the Code.
• Educational assistance. 2. The employee must adequately account to the
• Health insurance. employer for the expenses within a reasonable period of time.
• Medical reimbursement programs.
• Life insurance. 3. The employee must return any excess allowance or
• Disability benefits. reimbursement within a reasonable period of time. See
• Long-term care insurance. Regulations section 1.62-2 and Pub. 535, Business
• Dependent care assistance. Expenses, for explanations of accountable plans.
• Adoption assistance. The method by which benefits under an accountable plan
• Payment or reimbursement by the organization of (or are provided (whether reimbursement, cash advances with
payment of liability insurance premiums for) any penalty, tax, follow-up accounting, or charge by the employee on
or expense of correction owed under chapter 42 of the company credit card) isn't material. Payments that don't
Internal Revenue Code, any expense not reasonably incurred qualify under the accountable plan rules, such as payments
by the person in connection with a civil judicial or civil for which the employee didn't adequately account to the
administrative proceeding arising out of the person's organization, or allowances that were more than the payee
performance of services on behalf of the organization, or any spent on serving the organization, are compensation.
expense resulting from an act or failure to act with respect to
Directors and trustees are treated as employees for
which the person has acted willfully and without reasonable
purposes of the working condition fringe provisions of section
cause.
132. Therefore, treat cash payments to directors or trustees
The list above is not all-inclusive. made under circumstances substantially identical to the
Disregarded benefits. Disregarded benefits under accountable plan provisions as a section 132 working
Regulations section 53.4958-4(a)(4) need not be reported in condition fringe.
column (D). Disregarded benefits generally include fringe See Pub. 15-B, Employer's Tax Guide to Fringe Benefits;
benefits excluded from gross income under section 132. Pub. 521, Moving Expenses; and Unreimbursed Employee
These benefits include the following. Expenses in Pub. 529, Miscellaneous Deductions, for further
• No-additional cost service. explanation of section 132 fringe benefits and for determining
• Qualified employee discount. whether a given section 132 fringe benefit is available to
• De minimis fringe. nonemployees, such as directors and trustees, or to persons
• Reimbursements under an accountable plan. who no longer work for the organization.
• Working condition fringe.
Column (F). Enter in column (F) any payment reported in
• Qualified transportation fringe.
this year's column (B) to the extent such payment was
• Qualified moving expense reimbursement.
already reported as deferred compensation to the listed
• Qualified retirement planning services.
person on a prior Form 990, 990-EZ, or 990-PF. For this
• Qualified military base realignment and closure fringe.
purpose, the amount must have been reported as
De minimis fringe. A de minimis fringe is a property or compensation specifically for the listed person on the prior
service the value of which, after taking into account the form.
frequency with which similar fringes are provided by the
employer to the employees, is so small as to make Part III. Supplemental Information
accounting for it unreasonable or administratively impractical. Use Part III to provide narrative information, explanations, or
Working condition fringe. A working condition fringe is descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a,
any property or service provided to an employee to the 5b, 6a, 6b, 7, and 8, and for Part II. List in Part III the name of
extent that, if the employee paid for the property or service, each unrelated organization that provided compensation to
the payment would be deductible by the employee under persons listed in Form 990, Part VII, Section A; the type and
section 162 (ordinary and necessary business expense) or amount of compensation the unrelated organization paid or
section 167 (depreciation). accrued; and the person receiving or accruing such
In some cases, property provided to employees may be compensation. Also use Part III to provide other narrative
used partly for business and partly for personal purposes, explanations and descriptions, as applicable. Identify the
such as automobiles. In that case, the value of the personal specific part and line(s) that the response supports.
use of such property is taxable compensation, and the

-6- 2023 Instructions for Schedule J (Form 990)

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