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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
if they own more than 50% of the stock (by voting power or
value) of the corporation.
Control of a partnership or LLC. One or more persons
control a partnership if they own more than 50% of the profits or
capital interests in the partnership (including an LLC treated as a
partnership or disregarded entity for federal tax purposes,
regardless of the designation under state law of the ownership
interests as stock, membership interests, or otherwise). A
person also controls a partnership if the person is a managing
partner or managing member of a partnership or LLC that has
three or fewer managing partners or managing members
(regardless of which partner or member has the most actual
control), or if the person is a general partner in a limited
partnership that has three or fewer general partners (regardless
of which partner has the most actual control). For this purpose, a
“managing partner” is a partner designated as such under the
partnership agreement, or regularly engaged in the management
of the partnership even though not so designated.
Control of a trust with beneficial interests. One or more
persons control a trust if they own more than 50% of the
beneficial interests in the trust. A person’s beneficial interest in a
trust shall be determined in proportion to that person’s actuarial
interest in the trust as of the end of the tax year.
Control can be indirect. For example, if the filing organization
controls Entity A, which in turn controls Entity B, the filing
organization will be treated as controlling Entity B. To determine
indirect control through constructive ownership of a corporation,
rules under section 318 apply. Similar principles apply for
purposes of determining constructive ownership of another entity
(a partnership or trust). If an entity X controls an entity treated as
a partnership by being one of three or fewer partners or
members, then an organization that controls X also controls the
partnership.
See Regulations sections 301.7701-2, -3, and -4 for more
information on classification of corporations, partnerships,
disregarded entities, and trusts.
Line 50. Five Highest Compensated Employees
Over $100,000
Complete this table for the five employees (other than officers,
directors, trustees, and key employees as defined in the Part IV
instructions, earlier) with the highest annual compensation over
$100,000. On line 50f, enter the number of other employees
(other than officers, directors, trustees, and key employees) with
annual compensation over $100,000 who aren’t individually
listed.
A fiscal-year organization must use the calendar year ending
within its tax year to determine its five highest compensated
employees over $100,000, and to report the compensation.
Combine the compensation includible in Part VI, columns (c),
(d), and (e), in determining whether compensation exceeds
$100,000 for the calendar year.
See the Part IV instructions, earlier, for more information on
compensation reporting and for completing table columns (a)
through (e) of line 50, and for information on the
$10,000-per-item exception for column (e).
Example. Sam isn’t a key employee. The organization uses
a calendar tax year. During the year, Sam received a salary of
$80,000 and a $2,000 bonus. Sam contributed $5,000 of the
salary on a pre-tax basis to a qualified defined-contribution
retirement plan, and received a matching employer contribution
of $5,000 from the organization. Sam contributed another $5,000
of the salary on a pre-tax basis to a qualified health plan. Sam
received from the employer nontaxable health benefits for self
and family of $10,000, and nontaxable family educational
benefits of $5,000.
To determine whether Sam is to be listed as among the five
highest compensated employees, Sam's compensation in
column (c) would be $82,000, the amount reportable in box 5 of
Form W-2 consisting of the $80,000 salary (including Sam’s
contributions to the qualified plans) and the $2,000 bonus.
Sam's compensation in column (d) would be $15,000, consisting
of the organization's payments of $5,000 to the retirement plan
and $10,000 to the health plan. Sam wouldn’t report the $5,000
in nontaxable family educational benefits in column (e) because
it is excluded under the $10,000-per-item exception for column
(e). Thus, Sam's total compensation of $97,000 wouldn’t place
Sam among the five highest compensated employees over
$100,000.
See Pub. 525 for more information.
Line 51. Five Highest Compensated
Independent Contractors Over $100,000
Complete this table for the five highest compensated
independent contractors that received more than $100,000 in
compensation for services, whether professional services or
other services, from the organization. On line 51d, enter the
number of other independent contractors with annual
compensation over $100,000 that aren’t individually listed.
Independent contractors include organizations as well as
individuals and can include professional fundraisers, law firms,
accounting firms, publishing companies, management
companies, and investment management companies. Do not
report public utilities or insurance providers as independent
contractors. See Pub. 1779, Independent Contractor or
Employee, and Pub. 15-A, Employer's Supplemental Tax Guide,
for distinguishing employees from independent contractors.
The organization must use the calendar year ending with or
within its tax year in determining its five highest compensated
independent contractors and reporting their compensation in
such year on line 51.
Column (c)—Compensation. Enter the amount of
compensation the organization paid, whether reported in box 1
of Form 1099-NEC and/or box 6 of Form 1099-MISC or paid
under the parties’ agreement or applicable state law, for the
calendar year ending with or within the organization’s tax year.
Otherwise, report the amount paid under the parties' agreement
or applicable state law.
Forms 1099-NEC and 1099-MISC aren’t always required
to be issued for payments to an independent contractor.
Compensation includes fees and similar payments to
independent contractors but not reimbursement of expenses.
However, for this purpose, the organization must report the gross
payment to the independent contractor that includes expenses
and fees if the expenses aren’t separately reported to the
organization.
Signature Block
The return must be signed by the current president, vice
president, treasurer, assistant treasurer, chief accounting officer,
or other corporate officer (such as tax officer) who is authorized
to sign as of the date this return is filed. A receiver, trustee, or
assignee must sign any return any one of them file for a
corporation or association. See Regulations section 1.6012-3(b)
(4). For a trust, the authorized trustee(s) must sign.
Paid Preparer
Generally, anyone who is paid to prepare the return must sign
the return, list the preparer taxpayer identification number
(PTIN), and fill in the other blanks in the Paid Preparer Use Only
area. An employee of the filing organization isn’t a paid preparer.
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2023 Instructions for Form 990-EZ