By Jason Green, CPA
Non-profits must ensure they remain compliant with federal regulations governing retirement plans, including the Roth contribution provisions under Secure 2.0. Non-profit executives should ensure they’re properly reporting contribution details on IRS Form 990. See below for more tidbits:
Form 990, Part IX – Statement of Functional Expenses:
Line 8 (Pension Plan Contributions): This line is where the organization would report pension plan contributions, including Roth nonelective and matching contributions.
While Roth contributions are not tax-deductible for employees, they are still considered a benefit provided by the organization. Therefore, these amounts would be included as part of the organization’s pension plan or retirement benefits.
Form 990, Schedule J – Compensation Information:
If the Roth contributions are part of executive compensation, particularly if the total compensation package of key officers or employees exceeds reporting thresholds (such as $150,000), the organization might also need to report them in Schedule J, which details compensation and benefits for key employees. Consider using the Part III area.
Form 990, Part VII – Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors:
In Part VII, compensation figures reported for employees include total amounts paid, including any retirement benefits such as Roth nonelective and matching contributions. These contributions are included when calculating total compensation for key individuals.
This article was published in conjunction with our parent brand, Bethsaida Consulting Group LLC, an Indianapolis based CPA firm. Click here for a high level review of Roth IRA considerations for non-profits.
