Your 501(c)(3) Status
Local unit PTAs are nonprofits, known to the IRS as 501(c)(3) organizations.
Requirements to Maintain Your 501(c)(3) Status
It is very important that PTAs maintain and protect their tax-exempt status. They must not violate certain restrictions that apply to their 501(c)(3) classifications:
- Per the IRS, a PTA must file the appropriate Form 990 every year. There are no exceptions to this requirement. Not filing the Form 990 will place the PTA's tax-exempt status in jeopardy and may result in the PTA having to pay significant fines and penalties. If you discover your PTA is currently delinquent in filing the appropriate Form 990, contact your state PTA immediately.
A PTA must be organized and operated exclusively for charitable, educational or scientific purposes (the mission as defined in bylaws).
A PTA's resources and funds cannot be used for the private benefit of an individual.
- A PTA cannot engage in any political activity. The IRS considers political activity working for or against a candidate for public office at any level. Associations that are classified as 501(c)(3) are forbidden to support or campaign against candidates for public office.
A PTA can only engage in an insubstantial amount of lobbying activity. PTAs are encouraged to advocate on behalf of the needs of their PTAs and their members, so be sure to understand the limitations.
Upon a PTA's dissolution, its assets must be distributed for one or more of those defined exempt purposes.
The IRS considers both the PTA’s bylaws and activities to assess whether it qualifies for tax-exempt status.
One major advantage for PTAs that have 501(c)(3) status is that contributions to them may be deductible on donors' federal and state income taxes. In addition, PTA members who receive only minimal reimbursement for their PTA-related expenses may be able to treat the balance as a charitable gift. Examples of possible expense deductions include transportation, telephone calls, meals and lodging. Consult current IRS rulings for allowable deductions.