990 Schedule J Instructions for Schedule J (Form 990)

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2022

Instructions for Schedule J
(Form 990)

Department of the Treasury
Internal Revenue Service

DRAFT AS OF
October 19, 2022

Compensation Information

Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to
Schedule J (Form 990) and its instructions, such as
legislation enacted after they were published, go to IRS.gov/
Form990.

organization and its related organizations. Part I, lines 5
through 9, must be completed only by section 501(c)(3),
section 501(c)(4), and section 501(c)(29) organizations.
Part II requires detailed compensation information for
individuals for whom the organization answered “Yes” on
Form 990, Part IV, line 23. Not all persons listed on Form
990, Part VII, Section A, will necessarily be listed in
Schedule J, Part II.

Reminder

Part III is used to provide explanations of answers as
required in Part I or II.

Form 1099-NEC and nonemployee compensation reporting. Beginning with tax year 2020, Form 1099-NEC,
Nonemployee Compensation, is used to report nonemployee
compensation. Accordingly, where the Form 990 references
reporting amounts of compensation from Form 1099-MISC,
Miscellaneous Income, be sure to include nonemployee
compensation from box 1 of Form 1099-NEC. See the
instructions for additional information.

Unless stated otherwise, all questions in this schedule
pertain to activity during the calendar year ending with or
within the organization's tax year.

General Instructions

Note. Terms in bold are defined in the Glossary of the
Instructions for Form 990, Return of Organization Exempt
From Income Tax.

Purpose of Schedule

Schedule J (Form 990) is used by an organization that files
Form 990 to report compensation information for certain
officers, directors, individual trustees, key employees,
and highest compensated employees, and information on
certain compensation practices of the organization.

Who Must File

An organization that answered “Yes” on Form 990, Part IV,
line 23, must complete Schedule J. Do not file Schedule J for
institutional trustees.
If an organization isn't required to file Form 990 but
chooses to do so, it must file a complete return and provide
all of the information requested, including the required
schedules.

Specific Instructions
Part I asks questions regarding certain compensation
practices of the organization. Part I generally pertains to all
officers, directors, trustees, and employees of the
organization listed on Form 990, Part VII, Section A,
regardless of whether the organization answered “Yes” to
line 23 of Form 990, Part IV, for all such individuals.
However, only the organizations that are described in Who
Must File, earlier, must complete Part I. Part I, lines 1, 2, 3, 7,
8, and 9 require reporting on the compensation practices of
the filing organization, but not of related organizations.
Lines 4 through 6 require information regarding both the filing
Oct 19, 2022

Part I. Questions Regarding
Compensation

For purposes of Part I, a listed person is a person listed on
Form 990, Part VII, Section A.

Line 1. Report information regarding certain benefits (if any)
provided to persons listed on Form 990, Part VII, Section A,
line 1a.
Line 1a. Check the appropriate box(es) if the organization
provided any of the listed benefits to any of the persons listed
on Form 990, Part VII, Section A, regardless of whether such
benefits are reported as compensation in box 1 or box 5 of
Form W-2, Wage and Tax Statement; box 6 of Form
1099-MISC; or box 1 of Form 1099-NEC. For each of the
listed benefits provided to or for a listed person, provide in
Part III the following information.
• The type of benefit.
• The listed person who received the benefit, or a
description of the types (for example, all directors) and
number of listed persons that received the benefit.
• Whether the benefit, or any part of it, was treated as
taxable compensation to the listed person.
First-class travel refers to any travel on a passenger
airplane, train, or boat with first-class seats or
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
classes between first class and coach, such as business
class on commercial airlines. Bump-ups to first class free of
charge or as a result of using frequent flyer benefits, or
similar arrangements that are at no additional cost to the
organization, can be disregarded.
Charter travel refers to travel on an airplane, train, or boat
under a charter or rental arrangement. Charter travel also
includes any travel on an airplane or boat that is owned or
leased by the organization.
Travel for companions refers to any travel of a listed
person's guest not traveling primarily for bona fide business
purposes of the organization. It also refers to any travel of a

Cat. No. 51525Q

including the organization's top management official (all
referred to as “top management official”). An organization
can answer “Yes” if it checked the “Discretionary spending
account” box on line 1a and required substantiation of
expenses under the rules for accountable plans for all listed
benefits on line 1a other than for discretionary spending
accounts.

listed person's family members, whether or not for bona fide
business purposes.
Tax indemnification and gross-up payments refer to the
organization's payment or reimbursement of any tax
obligations of a listed person.
Discretionary spending account refers to an account or
sum of money under the control of a listed person with
respect to which the person isn’t accountable to the
organization under an accountable plan, whether or not
actually used for any personal expenses. Accountable plans
are discussed in Accountable plan amounts, later (under the
Part II, column (D), instructions).
Housing allowance or residence for personal use refers to
any payment for, or provision of, housing by the organization
for personal use by a listed person, including a ministerial
housing or parsonage allowance.
Payments for business use of personal residence refers to
any payment by the organization for the use of all or part of a
listed person's residence for any purpose of the organization.
Health or social club dues or initiation fees refers to any
payment of dues by the organization for the membership of a
listed person in a health or fitness club or a social or
recreational club, whether or not such clubs are tax exempt.
It doesn't include membership fees for an organization
described in section 501(c)(3) or section 501(c)(6) unless
such organization provides health, fitness, or recreational
facilities available for the regular use of a listed person.
Health club dues don't include provision by the organization
of an on-premises athletic facility described in section 132(j)
(4), or provision by a school of an athletic facility available for
general use by its students, faculty, and employees. Dues
include the entrance fee, periodic fees, and amounts paid for
use of such facilities.
Personal services refers to any services for the personal
benefit of a listed person or the family or friends of a listed
person, whether provided regularly (on a full-time or part-time
basis) or as needed, whether provided by an employee of
the organization or independent contractor (and whether
the independent contractor is an individual or an
organization). They include, but aren't limited to, services of a
babysitter, bodyguard, butler, chauffeur, chef, concierge or
other person who regularly runs non-incidental personal
errands, escort, financial planner, handyman, landscaper,
lawyer, maid, masseur/masseuse, nanny, personal trainer,
personal advisor or counselor, pet sitter, physician or other
medical specialist, tax preparer, and tutor for nonbusiness
purposes. Personal services don't include services provided
to all employees on a nondiscriminatory basis under a
qualified employee benefit plan.
Line 1b. If the organization provided any of the benefits
listed in line 1a to one or more listed persons, answer “Yes” if
the organization followed a written policy regarding the
payment, provision, or reimbursement of all such benefits to
listed persons. If the organization didn't follow a written policy
for payment, provision, or reimbursement of any listed
benefits, explain in Part III who determined the organization
would provide such benefits and the decision-making
process.

Line 3. Check the appropriate box(es) to indicate which
methods, if any, the organization used to establish the
compensation of the organization's top management
official. If the organization relied on a compensation
consultant that used a method described in line 3 to help
determine compensation for the top management official, the
organization may check the box for that method in line 3. Do
not check any box(es) for methods used by a related
organization to establish the filing organization's
compensation of the filing organization's top management
official. Explain in Part III if the organization relied on a
related organization that used one or more of the methods
described next to establish the top management official's
compensation.
Compensation committee refers to a committee of the
organization's governing body responsible for determining
the top management official's compensation package,
whether or not the committee has been delegated the
authority to make an employment agreement with the top
management official on behalf of the organization. The
compensation committee can also have other duties.
Independent compensation consultant refers to a person
outside the organization who advises the organization
regarding the top management official's compensation
package, holds the official out to the public as a
compensation consultant, performs valuations of nonprofit
executive compensation on a regular basis, and is qualified
to make valuations of the type of services provided. The
consultant is independent if the consultant does not have a
family relationship or business relationship with the top
management official, and if a majority of the appraisals are
performed for persons other than the organization, even if the
consultant's firm also provides tax, audit, and other
professional services to the organization.
Form 990 of other organizations refers to compensation
information reported on a Form 990 series return of similarly
situated organizations, and includes Forms 990; 990-EZ,
Short Form Return of Organization Exempt From Income
Tax; and 990-PF, Return of Private Foundation.
Written employment contract refers to one or more recent
or current written employment agreements to which the top
management official and another organization are or were
parties, written employment agreements involving similarly
situated top management officials with similarly situated
organizations, or written employment offers to the top
management official from other organizations dealing at
arm's length.
Compensation survey or study refers to a study of top
management official compensation or functionally
comparable positions in similarly situated organizations.
Approval by board or compensation committee refers to
the ultimate decision by the governing body or compensation
committee on behalf of the organization regarding whether to
enter into an employment agreement with the top
management official, and the terms of such agreement.

DRAFT AS OF
October 19, 2022

Line 2. Answer “Yes” if the organization required
substantiation of all expenses or benefits listed on line 1a, in
accordance with the rules for accountable plans discussed
in Accountable plan amounts, later (under the Part II, column
(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
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2022 Instructions for Schedule J (Form 990)

be paid a bonus equal to x% of B's net revenues from a
particular department operated by B for a specified period of
time. This arrangement is a payment contingent on revenues
of the organization, and must be reported on line 5,
regardless of whether the payment is contingent on
achieving a certain revenue target. However, if instead the
bonus payment is a specific dollar amount (for instance,
$5,000) to be paid only if a gross revenue or net revenue
target of the department is achieved, the payment isn't
contingent on revenues of the organization for this purpose.

related organization under any arrangement described in
lines 4a through 4c, and report the amounts paid during the
year to each such listed person. Also describe in Part III the
terms and conditions of any arrangement described in lines
4a through 4c in which one or more listed persons
participated during the year, regardless of whether any
payments to the listed person were made during the year.
Line 4a. Answer “Yes” if a listed person received a
severance or change-of-control payment from the
organization or a related organization. A severance
payment is a payment made if the right to the payment is
contingent upon the person's severance from service in
specified circumstances, such as upon an involuntary
separation from service or under a separation or termination
agreement voluntarily entered into by the parties. Payments
under a change-of-control arrangement are made in
connection with a termination or change in the terms of
employment resulting from a change in control of the
organization. Treat as a severance payment any payment to
a listed person by the organization or a related organization
in satisfaction or settlement of a claim for wrongful
termination or demotion.
Line 4b. Answer “Yes” if a listed person participated in or
received payment from any supplemental nonqualified
retirement plan established, sponsored, or maintained by or
for the organization or a related organization. A
supplemental nonqualified retirement plan is a nonqualified
retirement plan that isn't generally available to all employees
but is available only to a certain class or classes of
management or highly compensated employees. For this
purpose, include as a supplemental nonqualified retirement
plan a plan described in section 457(f) (but don't include a
plan described in section 457(b)) and a split-dollar life
insurance plan.
Line 4c. Answer “Yes” if a listed person participated in or
received payment from the organization or a related
organization of any equity-based compensation (such as
stock, stock options, stock appreciation rights, restricted
stock, or phantom or shadow stock), or participated in or
received payment from any equity compensation plan or
arrangement sponsored by the organization or a related
organization, whether the compensation is determined by
reference to equity in a partnership, limited liability company,
or corporation. Equity-based compensation doesn't include
compensation contingent on the revenues or net earnings of
the organization, which are addressed by lines 5 and 6 later.

DRAFT AS OF
October 19, 2022

Line 6. Answer “Yes” if the organization paid or accrued with
respect to a listed person any compensation contingent
upon and determined in whole or in part by the net earnings
of one or more activities of the organization or a related
organization, or by the net earnings of the organization or a
related organization as a whole. Describe such
arrangements in Part III.
Example. A, a listed person, is an employee of
organization B. As part of A's compensation package, A is to
be paid a bonus equal to x% of B's net earnings for a
specified period of time. This arrangement is a payment
contingent on net earnings of the organization for line 6
purposes, regardless of whether the payment is contingent
on achieving a certain net earnings target. However, if
instead the bonus payment is a specific dollar amount to be
paid only if a net earnings target is achieved, the payment
isn't contingent on the net earnings of the organization for this
purpose.

Line 7. Answer “Yes” if the organization provided any
non-fixed payments, not described on lines 5 and 6, for a
listed person. Describe such arrangements in Part III. A fixed
payment is an amount of cash or other property specified in
the contract, or determined by a fixed formula specified in the
contract, which is to be paid or transferred in exchange for
the provision of specified services or property. A fixed
formula can incorporate an amount that depends upon future
specified events or contingencies, provided that no person
exercises discretion when calculating the amount of a
payment or deciding whether to make a payment, such as a
bonus. Amounts paid or accrued to any listed person that
aren't fixed amounts as defined earlier are non-fixed
payments. For example, any amount paid to a person under
a reimbursement arrangement where discretion is exercised
by any person as to the amount of expenses incurred or
reimbursed is a non-fixed payment. See Regulations section
53.4958-4(a)(3).
Exception. Amounts payable under a qualified pension,
profit-sharing, or stock bonus plan under section 401(a) or
under an employee benefit program that is subject to and
satisfies coverage and nondiscrimination rules under the
Internal Revenue Code (for example, sections 127 and 137),
other than nondiscrimination rules under section 9802, are
treated as fixed payments for purposes of line 7, regardless
of the organization's discretion with respect to the plan or
program. The fact that a person contracting with the
organization is expressly granted the choice to accept or
reject any economic benefit is disregarded in determining
whether the benefit constitutes a fixed payment for purposes
of line 7.

Example. A, a listed person, is an employee of
organization B. B owns an interest in C, a for-profit subsidiary
that is a stock corporation. As part of A's compensation
package, B provides restricted stock in C to A. This is an
equity-based compensation arrangement for purposes of
line 4c. The same would be true if C were a partnership or
limited liability company and B provided A a profits interest or
capital interest in C.
Line 5. Answer “Yes” if the organization paid or accrued with
respect to a listed person any compensation contingent
upon and determined in whole or in part by the revenues
(gross or net) of one or more activities of the organization or
a related organization, or by the revenues (gross or net) of
the organization or a related organization as a whole. For this
purpose, net revenues means gross revenues less certain
expenses, but doesn't mean net income or net earnings.
Describe such arrangements in Part III.

Line 8. Answer “Yes” if any amounts from the organization
reported on Form 990, Part VII, were paid under a contract
subject to the initial contract exception described in
Regulations section 53.4958-4(a)(3). Describe such
arrangements in Part III. Fixed payments made under an

Example. A, a listed person, is a physician employed by
organization B. As part of A's compensation package, A is to
2022 Instructions for Schedule J (Form 990)

-3-

column (E), under the $10,000-per-related-organization
exception, must be included on Schedule J, Part II, columns
(B)(i),
(B)(ii), and (B)(iii). If there is no compensation to report in a
particular column, enter “-0-.”
If the organization answered “Yes” to Form 990, Part VII,
Section A, line 5, report such compensation from the
unrelated organization as if it were received from the
organization, and enter the name of the unrelated
organization in Part III.
For a table showing how and where to report certain types
of compensation on Schedule J, see the instructions for
line 1 of Form 990, Part VII, Section A.
Any type and amount of other compensation that was
excluded from Form 990, Part VII, Section A, under the
$10,000-per-item exception for certain other compensation
items, must be included in Schedule J, Part II, column (C) or
(D).
For purposes of Part II, a listed person is a person
required to be listed in Part II.

initial contract aren't subject to section 4958. An initial
contract is a binding written contract between the
organization and a person who wasn't a disqualified person
(within the meaning of section 4958(f)(1)) with respect to the
organization immediately prior to entering into the contract.
See the instructions for line 7 for the definition of fixed
payments.
Line 9. Answer “Yes” if the payments described in line 8
were made under an initial contract that was reviewed and
approved by the organization following the rebuttable
presumption procedure described in Regulations section
53.4958-6(c). For more information on the initial contract
exception and rebuttable presumption procedure, see
Appendix G. Section 4958 Excess Benefit Transactions in
the Instructions for Form 990.

DRAFT AS OF
October 19, 2022

Part II. Officers, Directors, Trustees,
Key Employees, and Highest
Compensated Employees

Enter information for certain individuals listed on Form 990,
Part VII, Section A, as described below. Report
compensation for the calendar year ending with or within
the organization's tax year paid to or earned by the following
individuals.
• Each of the organization's former officers, former
directors, former trustees, former key employees, and
former five highest compensated employees listed on
Form 990, Part VII, Section A.
• Each of the organization's current officers, directors,
trustees, key employees, and five highest compensated
employees for whom the sum of Form 990, Part VII,
Section A, columns (D), (E), and (F) (disregarding any
decreases in the actuarial value of defined benefit plans) is
greater than $150,000.
• Each of the organization's current and former officers,
directors, trustees, key employees, and five highest
compensated employees who received or accrued
compensation from any unrelated organization or individual
for services rendered to the filing organization, as reported
on line 5 of Form 990, Part VII, Section A. List in Part III the
name of each unrelated organization that provided
compensation to such persons, the type and amount of
compensation it paid or accrued, and the person receiving or
accruing such compensation, as explained in the instructions
for Form 990, Part VII, Section A, line 5.

Column (A). Enter the name and title of each person who
must be listed in Part II.
Column (B). Amounts reported on Form 990, Part VII,
Section A, columns (D) and (E), must be broken out between
columns (B)(i), (B)(ii), and
(B)(iii).
For certain kinds of employees, such as certain

TIP members of the clergy and religious workers who

aren't subject to social security and Medicare taxes
as employees, the amount in box 5 of Form W-2 may be
blank or less than the amount in box 1 of Form W-2. In this
case, the amount required to be reported in box 1 of Form
W-2 for the listed persons must be reported, as appropriate,
in columns (B)(i), (B)(ii), and (B)(iii).
Column (B)(i). Enter the listed person's base
compensation included in box 1 or box 5 (whichever is
greater) of Form W-2, box 6 of Form 1099-MISC, or box 1 of
Form 1099-NEC issued to the person. Base compensation
means nondiscretionary payments to a person agreed upon
in advance, contingent only on the payee's performance of
agreed-upon services (such as salary or fees).
Column (B)(ii). Enter the listed person's bonus and
incentive compensation included in box 1 or box 5
(whichever is greater) of Form W-2, box 6 of Form
1099-MISC, or box 1 of Form 1099-NEC issued to the
person. Examples include payments based on satisfaction of
a performance target (other than mere longevity of service),
and payments at the beginning of a contract before services
are rendered (for example, signing bonus).
Column (B)(iii). Enter all other payments issued to the
listed person and included in box 1 or box 5 (whichever is
greater) of Form W-2, box 6 of Form 1099-MISC, or box 1 of
Form 1099-NEC but not reflected in column (B)(i) or (B)(ii).
Examples include, but aren't limited to, current-year
payments of amounts earned in a prior year, payments under
a severance plan, payments under an arrangement providing
for payments upon the change in ownership or control of the
organization or similar transaction, deferred amounts and
earnings or losses in a nonqualified defined contribution plan
subject to section 457(f) when they become substantially
vested, and awards based on longevity of service.

All current key employees listed on Form 990, Part

TIP VII, Section A, must also be reported on Schedule J,

Part II, because their reportable compensation, by
definition, exceeds $150,000.
Do not list any individuals in Schedule J, Part II, that aren't
listed on Form 990, Part VII, Section A. Do not list in Part II
management companies or other organizations providing
services to the organization. Do not list highest compensated
independent contractors reported on Form 990, Part VII,
Section B.
For each individual listed, enter compensation from the
organization on row (i), and compensation from all related
organizations on row (ii). Related organizations are
explained in the Glossary in the Instructions for Form 990.
Any type and amount of reportable compensation from
related organizations that was excluded from Form 990, Part
VII, Section A,

Column (C). Enter all current-year deferrals of
compensation for the listed person under any retirement or
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2022 Instructions for Schedule J (Form 990)

Organization A enters $6,000 in column (B)(iii) and $6,000 in
column (F).

other deferred compensation plan, whether qualified or
nonqualified, that is established, sponsored, or maintained
by or for the organization or a related organization. Report as
deferred compensation the annual increase or decrease in
actuarial value, if any, of a defined benefit plan, but don't
report earnings or losses accrued on deferred amounts in a
defined contribution plan. Do not enter in column (C) any
payments of compensation included in box 1 or box 5
(whichever is greater) of Form W-2, box 6 of Form
1099-MISC, or box 1 of Form 1099-NEC issued to the listed
person for the calendar year ending with or within the
organization's tax year. Enter a reasonable estimate if actual
numbers aren't readily available.
For this purpose, deferred compensation is compensation
that is earned or accrued in, or is attributable to, 1 year and
deferred for any reason to a future year, whether or not
funded, vested, or subject to a substantial risk of forfeiture.
This includes earned but unpaid incentive compensation
deferred under a deferred compensation plan. But don't
report in column (C) a deferral of compensation that causes
an amount to be deferred from the calendar year ending with
or within the tax year to a date that isn't more than 21/2
months after the end of the calendar year ending with or
within the tax year. Note that different rules can apply for
determining whether an arrangement provides for deferred
compensation for purposes of Internal Revenue Code
provisions such as section 83, 409A, 457(f), or 3121(v).
Do not report deferred compensation in column (C) before
it is earned or accrued under the principles described. For
this purpose, deferred compensation is generally treated as
earned or accrued in the year that services are rendered,
except when entitlement to payment is contingent on
satisfaction of specified organizational goals or performance
criteria (other than mere longevity of service) under the
deferred compensation plan. If the payment of an amount of
deferred compensation requires the employee to perform
services for a period of time, the amount is treated as
accrued or earned ratably over the course of the service
period, even though the amount isn't funded and may be
subject to a substantial risk of forfeiture until the service
period is completed.
Report deferred compensation for each listed person
regardless of whether such compensation is deferred as part
of a deferred compensation plan that is administered by a
separate trust, as long as the plan is established, sponsored,
or maintained by or for the organization or a related
organization for the benefit of the listed person.

Example 2. Under the terms of the executive’s
employment contract with Organization B beginning July 1 of
calendar year 1, an executive is entitled to receive $50,000 of
additional compensation after completing 5 years of service
with the organization. The compensation is contingent only
on the longevity of service. The $50,000 is treated as
accrued or earned ratably over the course of the 5 years of
service, even though it isn't funded or vested until the
executive has completed the 5 years. Organization B makes
a payment of $50,000 to the executive in calendar year 6.
Organization B enters $5,000 of deferred compensation in
column (C) for calendar year 1 and $10,000 for each of
calendar years 2 through 5. For calendar year 6,
Organization B enters $50,000 in column (B)(iii) and $45,000
in column (F).

DRAFT AS OF
October 19, 2022

Example 3. An executive participates in Organization C's
incentive compensation plan. The plan covers calendar
years 1 through 5. Under the terms of the plan, the executive
is entitled to earn 1% (0.01) of Organization C's total
productivity savings for each year during which Organization
C's total productivity savings exceed $100,000. Earnings
under the incentive compensation plan will be payable in
year 6, to the extent funds are available in a certain “incentive
compensation pool.” For years 1 and 2, Organization C's total
productivity savings are $95,000. For each of years 3, 4, and
5, Organization C's total productivity savings are $120,000.
Accordingly, the executive earns $1,200 of incentive
compensation in each of years 3, 4, and 5. The executive
does not earn anything under the incentive compensation
plan in years 1 and 2 because the relevant performance
criteria weren't met in those years. Although the amounts
earned under the plan for years 3, 4, and 5 are dependent
upon there being a sufficient incentive compensation pool
from which to make the payment, Organization C enters
$1,200 of deferred compensation in column (C) in years 3, 4,
and 5. In year 6, Organization C pays $3,600 attributable to
years 3, 4, and 5, and enters $3,600 in column (B)(ii) and
$3,600 in column (F).
Example 4. A new executive participates in Organization
D's nonqualified defined benefit plan, under which the
executive will receive a fixed dollar amount per year for a
fixed number of years beginning with the first anniversary of
retirement. The benefits don't vest until the executive serves
for 15 years with Organization D. Because the benefits
should be treated as accruing ratably over the 15 years, for
year 1 the actuarial value of 1/15th of the benefits is reported
as deferred compensation in column (C). For year 2, the
actuarial value of 2/15ths of the benefits minus last year's
value of 1/15th is reported as deferred compensation in
column (C). For year 3, the actuarial value of 3/15ths of the
benefits minus last year's value of 2/15ths is reported, and so
on.

The following examples illustrate when deferred
compensation is considered earned or accrued, as well as
when and how it is to be reported. In these examples,
assume that the amounts deferred aren't reported in box 1 or
box 5 of Form W-2, prior to the year during which the
amounts are paid.
Example 1. An executive participates in Organization A's
nonqualified deferred compensation plan. Under the terms of
the plan beginning January 1 of calendar year 1, the
executive earns for each year of service an amount equal to
2% (0.02) of their base salary of $100,000 for that year.
These additional amounts are deferred and aren't vested
until the executive has completed 3 years of service with
Organization A. In year 4, the deferred amounts for years 1
through 3 are paid to the executive. For each of the years 1
through 3, Organization A enters $2,000 of deferred
compensation for the executive in column (C). For year 4,
2022 Instructions for Schedule J (Form 990)

Column (D). Nontaxable benefits are benefits specifically
excluded from taxation under the Internal Revenue Code.
Report the value of all nontaxable benefits provided to or for
the benefit of the listed person, other than benefits
disregarded for purposes of section 4958 under Regulations
section 53.4958-4(a)(4). Common nontaxable and section
4958 disregarded benefits, referred to as fringe benefits
below, are discussed in detail beginning on this page.
Depending on the type of benefit, fringe benefits can be
provided only to employees or also to persons other than
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use of such property is taxable compensation, and the
value of the use for business purposes properly accounted
for is a working condition fringe benefit. Cell phones provided
to employees primarily for business purposes (other than
compensation) are a working condition fringe benefit; in such
case, the employee's personal use is a de minimis fringe.
See Notice 2011-72, 2011-38 I.R.B. 407. See Pub. 587,
Business Use of Your Home, for special rules regarding
deductibility of home expenses for business use.
Accountable plan amounts. An accountable plan is a
reimbursement or other expense allowance arrangement that
meets each of the following rules.
1. The expenses covered under the plan must be
reasonable employee business expenses that are deductible
under section 162 or other provisions of the Code.
2. The employee must adequately account to the
employer for the expenses within a reasonable period of
time.
3. The employee must return any excess allowance or
reimbursement within a reasonable period of time. See
Regulations section 1.62-2 and Pub. 535, Business
Expenses, for explanations of accountable plans.

employees, such as directors, trustees, and independent
contractors. Fringe benefits can be entirely personal in
nature or can combine personal and business elements.
The taxability of a benefit can depend upon the form in
which it is provided. For example, a cash housing allowance
is ordinarily reportable in box 5 of Form W-2. Under section
119, housing provided for the convenience of the employer
can be excludable, and the fair rental value of in-kind housing
provided to certain school employees can be part taxable
and part excludable, depending on facts and circumstances.
Taxable benefits must be reported on Form W-2.
The following benefits provided for a listed person must be
reported in column (D) to the extent not reported as taxable
compensation in box 1 or box 5 of Form W-2, box 6 of Form
1099-MISC, or box 1 of Form 1099-NEC.
• Value of housing provided by the employer, except to the
extent such value is a working condition fringe.
• Educational assistance.
• Health insurance.
• Medical reimbursement programs.
• Life insurance.
• Disability benefits.
• Long-term care insurance.
• Dependent care assistance.
• Adoption assistance.
• Payment or reimbursement by the organization of (or
payment of liability insurance premiums for) any penalty, tax,
or expense of correction owed under chapter 42 of the
Internal Revenue Code, any expense not reasonably
incurred by the person in connection with a civil judicial or
civil administrative proceeding arising out of the person's
performance of services on behalf of the organization, or any
expense resulting from an act or failure to act with respect to
which the person has acted willfully and without reasonable
cause.
The list above is not all-inclusive.

DRAFT AS OF
October 19, 2022

The method by which benefits under an accountable plan
are provided (whether reimbursement, cash advances with
follow-up accounting, or charge by the employee on
company credit card) isn't material. Payments that don't
qualify under the accountable plan rules, such as payments
for which the employee didn't adequately account to the
organization, or allowances that were more than the payee
spent on serving the organization, are compensation.
Directors and trustees are treated as employees for
purposes of the working condition fringe provisions of section
132. Therefore, treat cash payments to directors or trustees
made under circumstances substantially identical to the
accountable plan provisions as a section 132 working
condition fringe.
See Pub. 15-B, Employer's Tax Guide to Fringe Benefits;
Pub. 521, Moving Expenses; and Unreimbursed Employee
Expenses in Pub. 529, Miscellaneous Deductions, for further
explanation of section 132 fringe benefits and for determining
whether a given section 132 fringe benefit is available to
nonemployees, such as directors and trustees, or to persons
who no longer work for the organization.

Disregarded benefits. Disregarded benefits under
Regulations section 53.4958-4(a)(4) need not be reported in
column (D). Disregarded benefits generally include fringe
benefits excluded from gross income under section 132.
These benefits include the following.
• No-additional cost service.
• Qualified employee discount.
• De minimis fringe.
• Reimbursements under an accountable plan.
• Working condition fringe.
• Qualified transportation fringe.
• Qualified moving expense reimbursement.
• Qualified retirement planning services.
• Qualified military base realignment and closure fringe.
De minimis fringe. A de minimis fringe is a property or
service the value of which, after taking into account the
frequency with which similar fringes are provided by the
employer to the employees, is so small as to make
accounting for it unreasonable or administratively impractical.
Working condition fringe. A working condition fringe is
any property or service provided to an employee to the
extent that, if the employee paid for the property or service,
the payment would be deductible by the employee under
section 162 (ordinary and necessary business expense) or
section 167 (depreciation).
In some cases, property provided to employees may be
used partly for business and partly for personal purposes,
such as automobiles. In that case, the value of the personal

Column (F). Enter in column (F) any payment reported in
this year's column (B) to the extent such payment was
already reported as deferred compensation to the listed
person on a prior Form 990, 990-EZ, or 990-PF. For this
purpose, the amount must have been reported as
compensation specifically for the listed person on the prior
form.

Part III. Supplemental Information

Use Part III to provide narrative information, explanations, or
descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a,
5b, 6a, 6b, 7, and 8, and for Part II. List in Part III the name of
each unrelated organization that provided compensation to
persons listed in Form 990, Part VII, Section A; the type and
amount of compensation the unrelated organization paid or
accrued; and the person receiving or accruing such
compensation. Also use Part III to provide other narrative
explanations and descriptions, as applicable. Identify the
specific part and line(s) that the response supports.

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2022 Instructions for Schedule J (Form 990)