How to File 990 Schedule O Using the Form-Based Filing Option

Some organizations are required to attach specific Schedules to their 990 returns in order to provide the IRS with additional information. The type of Schedule an organization may have to fill out depends on the type of organization, its activities, and its financial information. 

What is Schedule O?

Schedule O is used to provide supplementary information. Usually, organizations are required to expand upon their answers to specific questions asked in Form 990 or 990-EZ. It is also used to explain the organization’s operations and activities. 

Who must file Schedule O?

All organizations that file Form 990 and some that file 990-EZ must file Schedule O. If an organization is not required to file Form 990 or 990-EZ but still chooses to do so, they must file a complete return with required schedules. 

How do I file Schedule O?

Form 990

The required information will depend on your answers to certain parts of Form 990. The parts that may require extra explanation are

• Part III, Statement of Program Service Accomplishments
  • If you answered “yes” on Part III, Line 2
    • Describe significant program services performed by an organization that was not listed on the return
  • If you answered “yes” on Part III, Line 3
    • Explain if your organization made significant changes before the end of the tax year and how program services were conducted.
  • If you answered “yes” on Part III, Line 4d
    • Explain other program services conducted by the organization
• Part V, Statements Regarding Other IRS Filings and Tax Compliance
  • If you answered “no” on line 3b
    • Explain why the organization did not file Form 990-T despite receiving a gross amount of $1,000 in unrelated business income during the year.
  • If you answered “yes” or “non” on line 13a
    • Report information on each state in which the organization is permitted to issue qualified health plans, the amount of reserves each state requires the organization to maintain, and the amount of reserves the organization maintains and reports to each state.
  • If you answered “no” to line 14b
    • Explain why you did not file Form 720 to report payments it received for indoor tanning services during the year.
• Part VI, Government, Management, and Disclosure
  • Explain the material differences in voting rights among members of the organization’s governing body. Also, report if your organization delegated its authority to an executive committee with the authority to act on behalf of the governing body.
  • If you responded, “yes” to lines 2-7b
    • For every “yes,” describe the circumstances, processes, or changes made.
  • Explain “no” responses to lines 8a, 8b, and 10b.
• Part VII, Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors
  • Explain the compensation paid by a related organization. 
• Part IX, Statement of Functional Expenses
  • On Line 11g, explain the type and amount of each expense for other fees and services.
  • On Line 24e, explain all other expenses and provide the type and amount of each expense.
• Part XI, Reconciliation of Net Assets
  • Explain the other changes in net assets or fund balances reported on line 9.
• Part XII, Financial Statements and Reporting
  • Report a change in accounting method or a description of other accounting methods used in line 1B.
  • Explain the change in committee oversight review from the prior year on line 2c.
  • If you responded “no” to line 3b
    • Explain why the organization did not undergo the required audit or audits and also the steps taken by it if attempted to undergo the audits.

Form 990-EZ

• Form 990-EZ, Parts I, II, III, and V
  • Part I, Revenue, Expenses, and Changes in Net Assets or Fund Balances
    • Line 8- Explain the various sources of revenue generated by the organization for the tax year
    • Line 10- Include a list of every grantee organization or individual to whom the organization paid the grant amount over $5,000 for the tax year
    • Line 16- Include information on other expenses made by the organization that wasn’t reported on lines 10-15 on Part I
    • Line 20- Describe changes made in the net assets or fund balances between the beginning and end of the organization’s tax year that aren’t accounted for by the amount entered on line 18 part I
  • Part II, Balance Sheets
    • Describe other assets reported in line 24 part II of Form 990-EZ
    • Describe total liabilities entered in line 26 part II, including accounts payable, grants payable, mortgages or other loans payable, and deferred revenue
  • Part III, Statement of Program Service Accomplishments
    • Explain other program services conducted by the organization in response to line 31 Part III
  • Part V, Other information
    • If you answered “yes” to line 33
      • Include a detailed description of each significant activity conducted by the organization that wasn’t previously reported
    • If you answered “yes” to line 34
      • Describe significant changes made in organizing or governing documents
    • If you answered “no” to line 44d
      • Explain why the organization did not file Form 720 

With ExpressTaxExempt, Schedules are automatically generated onto forms based on the information provided. This ensures that clients will file a complete return with all information needed.

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