Form 990 Part VII: Who Must Be Listed and How to Report

Form 990 Part VII is where a tax-exempt organization lists the people who lead or are paid the most by it, along with their compensation. Section A covers current officers, directors, trustees, key employees, the five highest compensated employees over $100,000, and certain former insiders. Section B covers the five highest-paid independent contractors over $100,000. Compensation is reported on a calendar-year basis, split across three columns for pay from the filing organization, pay from related organizations, and estimated other compensation.¹

Get the categories and columns right and the rest of the form falls into place. Get them wrong and you risk penalties, an incomplete-return finding, or a closer look from the IRS at your executive pay.

Who Has to Be Listed in Section A

Section A pulls in three groups of current people plus a narrow band of former ones. Work through them in order, because the later groups exclude anyone already captured by the earlier ones.

Officers, Directors, and Trustees

Every current officer, director, and trustee gets listed, whether or not they were paid anything. Classification follows the actual role, not the title on the business card. A director or trustee is a 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 treat your top management official and 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. A board member who resigned in March still appears on that year’s return.

Key Employees

Key employees are non-governance staff with real authority and real pay. An employee qualifies only if all three tests are met for the calendar year ending with or within the organization’s tax year:

Compensation test. The employee received reportable compensation of more than $150,000 from the organization and all related organizations combined.²
Responsibility test. The employee has powers comparable to an officer or director, manages a segment representing 10% or more of the organization’s activities, assets, income, or expenses, or has authority over 10% or more of the organization’s capital spending, operating budget, or employee compensation.²
Top 20 test. The employee is among the 20 highest-paid people who cleared the first two tests. If more than 20 people qualify, only the 20 with the largest reportable compensation are treated as key employees.²

The responsibility test causes most of the trouble. 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 a person controls, not where they sit on the org chart.

Five Highest Compensated Employees

Once you’ve identified all officers, directors, trustees, and key employees, list up to five additional current employees who received more than $100,000 in reportable compensation from the organization and related organizations combined. Only people not already captured above are eligible for this bucket.³ If fewer than five employees clear $100,000, list only those who do.

Former Insiders

Part VII also reaches back. 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 must be 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 keeps departing executives visible on the return that pays them out.

The Calendar-Year Reporting Rule

This trips up fiscal-year filers more than anything else on the form. Even if your organization runs 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 compensation for calendar year 2025.

The rule applies to Part VII and Schedule J. It does not apply to the Statement of Functional Expenses in Part IX, which still uses the fiscal year.⁵ The IRS wants Part VII to line up with W-2s and 1099s, which are always calendar-year documents.

How to Fill the Six Columns

Section A has six columns, A through F. The design deliberately separates pay from the filing organization from pay from related organizations, and separates taxable pay from non-taxable benefits.¹

Columns A, B, and C

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

Column D: Reportable Compensation From the Organization

Column D is the amount reported on the person’s W-2 (for employees) or 1099-NEC (for independent contractors) from the filing organization only. It picks up base salary, bonuses, commissions, severance, and taxable fringe benefits such as personal use of a company car.

Column E: Reportable Compensation From Related Organizations

Column E is the same kind of W-2 or 1099-NEC compensation, but from related organizations: parents, subsidiaries, and brother-sister entities under common control. If a person received less than $10,000 from a particular related organization, that amount can be omitted from Part VII (though it may still need to be reported on Schedule J).⁶

Column F: Estimated Other Compensation

Column F catches compensation that doesn’t appear on a W-2 or 1099. Employer contributions to retirement plans, both qualified and non-qualified. Employer-paid health and life insurance premiums. Other non-taxable fringe benefits from the filing organization and from related organizations. The amounts are estimates because many of these benefits don’t carry an exact per-employee dollar figure until plan contributions are finalized.

Working condition fringes, like job-related education, business use of a company phone, or employer-provided outplacement services, are generally left out of reportable compensation because the employee could have deducted the cost as a business expense.⁷ Only the personal-use portion of a benefit, such as personal miles driven in a company car, shows up in the compensation columns.

Handling Related Organization Compensation

The $150,000 key employee threshold and the $100,000 highest compensated threshold both require you to add together compensation from the filing organization and every related organization. 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 has to be listed in Section A, you report compensation from each related organization that paid them $10,000 or more. Below $10,000, you can omit it from Part VII, but Schedule J requires all related organization compensation regardless of amount.

You do not have to list someone solely because they are a key employee of a related organization. They only appear on your Part VII if they also hold one of the qualifying roles at your organization.

Section B: Top Independent Contractors

Section B is separate from Section A and works differently. List the five highest-paid independent contractors who each received more than $100,000 in compensation for services during the tax year.³ For each, report name, business address, type of service provided, and total compensation. If fewer than five cleared $100,000, list only those who did. There are no related-organization or other-compensation columns here. Just who they are, what they did, and what you paid them.

When Part VII Triggers Schedule J

Part VII stands on its own for many organizations. Schedule J kicks in when any of the following is true:

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

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

Family and Business Relationships

The people listed in Part VII feed directly into Part VI, Line 2, which asks whether any current officer, director, trustee, or key employee reported in Part VII had a family or business relationship with another person listed in Part VII. If the answer is yes, identify the individuals and describe the relationship on Schedule O.¹ A brief label (“family relationship” or “business relationship”) is enough. Related-party arrangements draw IRS attention, and an undisclosed relationship discovered later looks worse than one reported upfront.

What Public Disclosure and the Sanctions Rules Mean for Your Reporting

Everything reported in Part VII becomes public. Exempt organizations must make their annual returns available for public inspection for three years from the return’s due date (with extensions) or actual filing date, whichever is later.¹⁰ In practice, most Forms 990 live permanently on sites like GuideStar and ProPublica’s Nonprofit Explorer, so the numbers you enter will be visible to donors, journalists, and watchdogs indefinitely.

That visibility connects Part VII to Section 4958. An excess benefit transaction, meaning paying an insider more than the value of what they provided, triggers a 25% excise tax on the recipient, with a further 200% tax if not corrected in time. Organization managers who knowingly approved the transaction face a separate 10% tax, capped at $20,000 per transaction.¹¹ The best protection is the rebuttable presumption of reasonableness, which applies when an authorized body free of conflicts approves the compensation in advance, relies on appropriate comparability data, and documents the basis of its decision at the time it is made.¹² When the presumption applies, the burden shifts to the IRS to prove the compensation was unreasonable.

Penalties for Filing Part VII Late or Incomplete

Missing or incomplete compensation reporting is treated as a failure to include required information, not just a paperwork glitch. For organizations with gross receipts under $1,208,500, the penalty is $20 per day the return is late or incomplete, capped at $12,000 or 5% of gross receipts, whichever is less. Organizations above that threshold face $120 per day, capped at $60,000.¹³ Blank Part VII columns or missing individuals count.¹⁴

Failing to file at all for three consecutive years brings automatic revocation of tax-exempt status on the due date of the third missed return, and the IRS cannot reverse a proper automatic revocation. The organization has to reapply for exemption from scratch.¹⁵ 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 happened, how it exercised ordinary business care, and what it has done to prevent a repeat.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
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Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Compensation Calendar Year Reporting Required
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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. Public Disclosure and Availability of Exempt Organization Returns and Applications – Public Disclosure Overview
11
Office of the Law Revision Counsel. 26 USC 4958 – Taxes on Excess Benefit Transactions
12
eCFR. 26 CFR 53.4958-6 – Rebuttable Presumption That a Transaction Is Not an Excess Benefit Transaction
13
Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Filing Procedures – Late Filing of Annual Returns
14
Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Filing Procedures – Abatement of Late Filing Penalties
15
Internal Revenue Service. Automatic Revocation of Exemption