The most up-to-date financial information and forms for PTAs are found here
What is a PTA in Good Standing?
For a local PTA to be “in good standing,” it must be in compliance with National PTA and Utah PTA Bylaws and guidelines, including the following:
Adhering to the purposes and basic policies of PTA
Having an EIN (Employer Identification Number) from the IRS on file with Utah PTA
- Submitting to Utah PTA the names and contact information of current officers
- Having Bylaws renewed by Utah PTA every three years
- Remitting national and state portions of membership dues to Utah PTA by dates designated. The current procedure requires local PTAs to make monthly remittances, by the 25th of each month.
- Submitting beginning of year paperwork which includes budget and approved minutes, signed Ethics/Conflict of Interest form, signed Basic Fiscal Management form, proof of insurance
- Submitting year-end financial statement, annual financial reconciliation, sales tax refund request and appropriate IRS filing
If a local PTA is not in good standing, neither the PTA nor the students attending the PTA’s school are eligible to participate in PTA programs (such as Reflections or Battle of the Bands) or receive awards. Sales tax refunds will not be issued to PTAs not in good standing, and these PTAs may be subject to loss of their tax-exempt status through Utah PTA’s group exemption with the IRS.
Is Our Local PTA Tax Exempt?
Utah PTA has secured a 501(c)(3) exemption ruling from the IRS, recognizing it as a public charity. Each local PTA in Utah in good standing is covered under Utah PTA’s group exemption. (The IRS group exemption number (GEN) is 7212.)
One major advantage of exempt status under section 501(c)(3) is that contributions to Utah PTA and its subordinate units may be treated as charitable contributions by donors in calculating their federal income taxes. If a potential donor needs verification of a local PTA’s exempt status, the local PTA should contact the Utah PTA office, who will provide a letter about the group ruling. Another significant advantage of exempt status is that most PTA fundraising activities are exempt from federal income taxes.
Utah PTA also has an exemption from sales tax from the Utah State Tax Commission. State law requires every PTA to pay sales tax on purchases under $1000 and then request a refund. Utah PTA has established a procedure for applying for a refund; instructions and forms are located in the Treasurer Handbook and at utahpta.org/treasurer. The Utah PTA tax-exempt number is 12510060-002-STC. For purchases over $1000, vendors may request a tax exemption certificate; PTAs can obtain that certificate by calling the Utah PTA office.
What is an IRS Determination or 501(c)(3) Letter?
The IRS issues a “determination letter” to organizations that have qualified for tax-exempt status. Because Utah PTA, as a central organization, determines which PTAs are included as subordinates under its group exemption ruling, anyone seeking to verify that a PTA in Utah is tax-exempt should contact the Utah PTA treasurer. Utah PTA can provide a letter about the group ruling and a copy of its determination letter from the IRS for potential donors, sponsors, or grantors. According to IRS Publication 4573, “donors may rely upon central organization verification with respect to deductibility of contributions to subordinates covered in a section 501(c)(3) group exemption ruling.”
What is a Form W-9?
Someone who is giving money to your PTA may ask you to complete Form W-9, entitled Request for Taxpayer Identification Number and Certification. The form is used simply to verify the PTA name, address, and EIN.
- On line 1: You will put your PTA name
- On line 2: You will put PTA Utah Congress, Inc.
- On line 3: You will check “C Corporation”
- On line 4: You will put “5”
- On lines 5 and 6: You will put your school address
- In Part I: You will put your PTA’s EIN number (**-*******)
- The president or the treasurer can sign and date the form
What Are the Requirements for Acknowledging Donors or Sponsors?
IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements, explains the federal tax law for charities (like PTAs) that receive tax-deductible contributions. The publication can be downloaded from the IRS website. Information about how the law applies to PTAs can be found in the Treasurers Handbook.
What Tax Filings Must a PTA Do?
All PTAs are required to file a tax return 990 with the IRS. Most will file a 990N, electronic notice (e-postcard) for tax exempt organizations not required to file form 990 or 990EZ. Please refer to Utah PTA Treasurer’s Handbook or the Utah PTA website for current instructions.
How Do We Go About Creating a Budget?
Budgets
- Help each board member determine what funds will be necessary to meet the goals you set together based on your “Needs Assessment.”
- Be realistic—use budgets from previous years as a guideline.
- A copy of your budget and the minutes of the meeting where the budget was approved must be submitted through MemberHub or to your council president/region director by September 15.
- Include funds for leadership training (conferences and Utah PTA conventions). Training is an important and long-lasting use of PTA funds. It will benefit your school for years to come, as well as your local board and your general membership. It is definitely a legitimate PTA expense.
The budget is your financial road map for the year. The budgeting process should be taken seriously. However, it does not need to be complicated.
Sources of information to create this year’s budget include last year’s financial records, a needs assessment, and input from each commissioner and/or chairperson.
The treasurer is the chair of the budget committee. The president is a member of the budget committee, as are other elected officers or general members as either elected or appointed by the president. The budget committee will develop a budget and then propose it to the entire executive committee for their approval. Once the proposed budget is approved by the executive committee, it must be approved by a majority vote of a quorum of the membership at the first general membership meeting of the year. This could be at a Back-to-School night or at a board meeting where the general membership has also been invited. A copy of the approved budget and the minutes of the general membership meeting where it was approved must be submitted through MemberHub or council/region treasurer by September 15.
Additional information about the budgeting process, including making motions and amending an approved budget, can be found on the treasurer page.
Where Can I Find a List of What Our PTA Can or Cannot Spend Money On?
There is no published list from either National PTA or the IRS of acceptable PTA expenditures. PTA’s Mission and its tax-exempt status should guide your decisions. All expenditures in the PTA budget must support the Mission of PTA. If there is a questionable expenditure, a good rule of thumb is to authorize the expenditure only if you could defend it to the IRS in case of an audit.
Utah PTA takes no official position on the appropriateness of specific expenditures of its affiliated local PTAs, except as follows:
- All activities should be in accordance with the purposes and mission of PTA, as outlined in the bylaws and as required by our status with the IRS as a 501(c)(3) public charity.
- A needs assessment should direct the work of the local PTA and its annual goals and objectives.
- All expenditures must be made with the budget categories and amounts approved by the general membership.
- Local PTAs should comply with the guidelines of the school district in which they operate.
How Do We Get an Annual Financial Reconciliation (AFR) of Our PTA Done?
- An Annual Financial Reconciliation (AFR) must be conducted at the end of each fiscal year, and in the event of a vacancy in the office of treasurer, before the new treasurer takes office.
- An AFR may be performed by an auditor or AFR committee of at least three members, appointed by the executive committee.
- The AFR report must be adopted by the general membership at the first general membership meeting of the new fiscal year.
- A copy of the AFR report must be submitted through MemberHub or council/region treasurer by August 1.
An annual AFR of the PTA’s books is required by the Bylaws (Article VII, Section 6). The AFR is to be performed either by an AFR committee of at least three members of the PTA or by an auditor. An AFR committee would perform an “internal AFR,” following Utah PTA’s recommended AFR procedure checklist. An outside auditor is not required to perform an AFR in accordance with generally accepted reconciliation standards. “Agreed-upon procedures” (based on the recommended internal AFR procedures) are sufficient to fulfill the requirement. An auditor who is a member of the PTA could perform an “internal AFR” such as would be performed by an AFR committee. Additional information about PTA AFR can be found in the Treasurer Handbook and on the treasurer page of the website.
What is a Year-End Financial Statement?
- A year-end financial statement must be prepared by the treasurer, giving a full accounting of all income and expenses for the year, including beginning and ending balances.
- The statement should include all accounts in the PTA name.
- The Year End Financial Statement must be submitted with the treasurer’s records for reconciliation.
- A copy of the year-end report must be submitted through MemberHub or council/region treasurer by August 1.
Please the treasurer's page for more detailed information. Click Here