My organization paid compensation for employees of other organizations. Should I report it in 990-EZ?
5.9k views | Last modified 9/5/2023 7:27:51 AM EST |

Applicable To
990-PF 990-N 990-EZ 990 8868 1120-POL

If your organization acquired services from a person, who is an officer of a management services company or who works in an employee leasing company or a professional employer organization, then you must consider that person as your employee.
Also, the compensation paid to those persons for the services provided must be as such that the organization paid them directly. The person mentioned can be anyone, including officers, directors, trustees, and key employees for any of the above-stated organizations.

Reporting compensation paid for other organization employees with Tax 990’s Interview-based Filing Style

  1. Log into your Tax 990 account.
  2. On the dashboard, click on the "Start Return" button.
  3. Select the "Form 990-EZ" option on the list of Federal returns.
  4. Enter your organization details and click "Next."
  5. On the "Organization Tax Year" page, select the year you want to file the information return. Once done, the subsequent steps will be to fill the actual parts of the form. 
  6. Under the More information about your Organization section, select "Start" for List of Officers, Directors, Trustees and Key Employees.
  7. On the List of Officers page, enter each employee’s names, titles, reportable compensation, and other information. You can either add the employee details one at a time or use the Bulk Upload feature if your organization has a voluminous amount of details to report. 
  8. Now, click Next and follow the subsequent steps as prompted.
  9. Review the details, Pay, and click the Transmit button to transmit your return to the IRS.

Reporting compensation paid for other organization employees with Tax 990’s Form-based Filing Style

To report the compensation paid for other organization employees using our form-based filing, please go to Part IV, List of Officers, Directors, Trustees, and Key Employees.

In this part, provide the below-mentioned details of the compensated employees. 

(a) Name and title
(b) Average hours per week devoted to position
(c) Reportable compensation (Forms W-2/1099-MISC)
(d) Health benefits, contributions to employee benefit plans, and deferred compensation
(e) Estimated amount of other compensation

Failure to fully complete Part IV can subject both your organization and the individuals responsible for such failure to penalties for filing an incomplete return.

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