Exempt Organization Annual Reporting Requirements: "Key Employee" Compensation Reporting on Form 990 Part VII


Because some of our managers report to the CEO or other executives, they don't have ultimate authority over the organization, so we don't need to report them as key employees on Form 990, right?

The answer depends on whether those employees manage a discrete segment or activity of the organization that represents 10 percent or more of the organization's assets, income, activities or expenses, or whether they have authority to control or determine 10 percent or more of the organization's capital expenditures, operating budget or employee compensation. If so, and if their reportable compensation from the organization and related organizations during the tax year exceeds $150,000, then they must be reported as key employees. If the organization has over 20 employees who meet these tests, then it would only report the top 20 most highly compensated as key employees.

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