What Is Other Compensation on Form 990: Categories and Thresholds

On Form 990, “other compensation” is the Column (F) catch-all in Part VII, Section A for economic benefits paid to officers, directors, trustees, key employees, and certain highly compensated employees that don’t already appear on a W-2 or 1099. It sweeps in employer retirement contributions, health benefits, housing allowances, personal use of organization vehicles, severance pay, gross-ups, below-market loans, and other taxable fringe benefits. The figure is reported on a calendar year basis and combines amounts from both the filing organization and any related organizations.

Where the Column Sits on the Form

Part VII, Section A uses three compensation columns, not the five that many filers expect. Column (D) is reportable compensation from the filing organization, generally the greater of Box 1 or Box 5 on the W-2, or Box 1 of a Form 1099-NEC. Column (E) is reportable compensation from related organizations, meaning entities under common control or in a parent-subsidiary relationship with the filer. Column (F) is other compensation from the filing organization and related organizations combined.¹

Column (F) exists to capture what falls outside the W-2 or 1099 figures in Columns (D) and (E): deferred compensation not currently taxable, employer contributions to retirement plans, nontaxable health benefits, and taxable fringe benefits not already reflected in reportable compensation. The IRS instructions are explicit that no item should be reported in more than one column.²

The finer breakdown that splits base pay, bonus, other reportable compensation, retirement and deferred compensation, and nontaxable benefits lives on Schedule J, Part II, not in Part VII. Part VII gives the public a summary number. Schedule J shows what’s inside it.

What Goes In the Other Compensation Column

Other compensation covers a wide set of payments and benefits. Some are obvious, others are easy to miss on the way to filing.

Retirement and Deferred Compensation

Employer contributions to qualified defined contribution plans, including 403(b) and 401(a) plans, belong in Column (F) to the extent they aren’t already included in reportable compensation. The annual increase in actuarial value of a qualified defined benefit plan is reported here as well, whether or not the benefit is funded or vested. Contributions to nonqualified deferred compensation arrangements, both funded and unfunded, and changes in actuarial value of nonqualified defined benefit plans, also go in this column.²

Health Benefits

Employer-paid health premiums, medical reimbursement programs, flexible spending arrangements, and the value of self-insured coverage all count when they aren’t already in reportable compensation. The IRS reads health benefits broadly to include dental, optical, drug, and medical equipment coverage. Disability insurance and long-term care premiums are not part of this category.²

Taxable Fringe Benefits

Personal use of an organization-owned vehicle or aircraft must be valued under IRS rules and reported here if not already reflected on the W-2. Club memberships are taxable fringes unless used exclusively for business. Payments the organization makes for an executive’s personal financial planning, estate planning, or legal fees are economic benefits taxable to the individual, and they belong in this column when not already in reportable compensation.

Housing Allowances and Employer-Provided Housing

Cash housing allowances and the fair rental value of employer-provided housing are reportable unless a narrow exclusion applies. Federal tax law lets the value of lodging be excluded from gross income only when the employee is required to accept it on the employer’s business premises as a condition of employment.³ Educational institutions have a separate exclusion for qualified campus lodging. Outside those exceptions, the full value goes in Column (F).

Severance Payments

Any payments made on an executive’s departure, whether a lump sum or installments over months, are included in other compensation to the extent they aren’t in reportable compensation for the year. Scheduled post-termination payments that straddle tax years are a frequent miss.

Gross-Ups

When the organization pays an extra amount to cover an executive’s personal tax liability on another compensation element, that gross-up is itself taxable compensation. Report the full gross-up in Column (F) if it isn’t already on the W-2.

Below-Market Loans

Lending to an officer or key employee at a rate below the applicable federal rate produces imputed compensation equal to the forgone interest. For a demand loan, imputed interest is calculated on the last day of each calendar year. For a term loan, the discount is calculated at origination. A de minimis exception applies when the total outstanding balance stays at or below $10,000.⁴ The imputed amount goes in Column (F).

Property Transferred for Services

Property transferred to an individual in connection with services becomes taxable income to the extent its fair market value exceeds what the individual paid, once it’s no longer subject to a substantial risk of forfeiture or becomes transferable.⁵ Any such amount not already captured on a W-2 flows into Column (F).

The $10,000 De Minimis Exception and Its Limits

Not every small benefit has to be tracked individually. If a particular type of other compensation totals less than $10,000 for the calendar year for a given individual, the organization can leave it out of Part VII. Five categories, though, must be reported regardless of amount:²

Employer contributions to qualified defined contribution plans such as 401(a) or 403(b) plans.
The annual increase or decrease in actuarial value of a qualified defined benefit plan.
Health benefits: premiums, reimbursement programs, and self-insured coverage values not in reportable compensation.
Nonqualified defined contribution plans: employer and employee contributions to funded plans, plus deferrals under unfunded plans.
Nonqualified defined benefit plans: the annual change in actuarial value.

Because those five items are the core of most executives’ other compensation, the exception typically only clears out smaller fringes like club dues or personal financial planning below the threshold. It’s useful, but it doesn’t excuse the big items.

Calendar Year, Not Fiscal Year

Fiscal year filers hit an easy trap here. Compensation in Part VII, Section A is reported on a calendar year basis, specifically the calendar year ending with or within the organization’s fiscal year. An organization with a June 30 fiscal year end reports compensation for the prior January through December calendar year in Part VII.⁶

The calendar year rule applies to Part VII and to Schedule J. Compensation expense in the Statement of Functional Expenses (Part IX) still follows the fiscal year. Mixing the two periods is one of the more common Form 990 errors.

When Schedule J Requires the Detail

The single Column (F) figure is only a summary. When total compensation from the filing organization and related organizations exceeds $150,000 for any current officer, director, trustee, or key employee, Schedule J is required and the total has to be broken into components.⁷ Schedule J is also required when the organization lists any former officer, director, trustee, or key employee in Part VII, or when an unrelated organization paid compensation to a listed individual.

Schedule J, Part II gives each listed person columns for base compensation, bonus and incentive pay, other reportable compensation, retirement and deferred compensation, and nontaxable benefits. That’s where a reader can see whether a large Column (F) figure reflects ordinary retirement contributions or something like a housing allowance or severance package.⁸

What Happens if a Benefit Goes Unreported

Missing an economic benefit on the Form 990 (or on a W-2 or 1099) creates a specific exposure worth understanding before you file. Under the intermediate sanctions regulations, an unreported benefit is treated as an “automatic” excess benefit transaction. That label is harsh because it applies regardless of whether the compensation was actually reasonable. Even if the total pay package was well within market rates, the unreported portion is treated as an excess benefit in its entirety.⁹

The consequences flow from there. The disqualified person who received the benefit faces an initial excise tax of 25% of the excess benefit amount, and a 200% second-tier tax if the excess isn’t corrected within the taxable period. Any organization manager who knowingly participated owes a separate 10% tax, capped at $20,000 per transaction.¹⁰ In serious cases the IRS may also pursue revocation of tax-exempt status.¹¹

There is a narrow escape valve. If the failure to report was due to reasonable cause, meaning either significant mitigating factors existed or the failure arose from events beyond the organization’s control, and the organization acted responsibly before and after the failure, the benefit is treated as if it had been properly reported. Proving reasonable cause after the fact is a heavy lift. Getting Column (F) right on the original return is far easier than defending an omission later.⁹

1
Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Compensation: Meaning of Reportable Compensation and Other Compensation
2
Internal Revenue Service. Instructions for Form 990
3
Office of the Law Revision Counsel. 26 US Code 119 – Meals or Lodging Furnished for the Convenience of the Employer
4
Office of the Law Revision Counsel. 26 US Code 7872 – Treatment of Loans With Below-Market Interest Rates
5
Office of the Law Revision Counsel. 26 US Code 83 – Property Transferred in Connection With Performance of Services
6
Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Compensation: Calendar Year Reporting Required
7
Internal Revenue Service. Exempt Organization Annual Reporting Requirements: Filing Requirements for Schedule J, Form 990
8
Internal Revenue Service. Schedule J (Form 990) – Compensation Information
9
Internal Revenue Service. “Automatic” Excess Benefit Transactions Under IRC 4958
10
Office of the Law Revision Counsel. 26 US Code 4958 – Taxes on Excess Benefit Transactions
11
Internal Revenue Service. Intermediate Sanctions