It’s Why Wednesday! What are the frequent errors units make on PTA tax forms?
Filing Your Tax Forms
If you are like a lot of people, the thought of dealing with tax forms or the IRS in any capacity makes you shudder. Unfortunately, all nonprofits have tax forms that they have to file every year. Fortunately, PTA has resources to make tax filings easier and for many of you, your tax filings can be done online, with very little angst.
Now, about those forms…Every nonprofit in California, which includes EVERY PTA, is required to submit tax filings to three different government agencies: the Internal Revenue Service (IRS), the California Franchise Tax Board (FTB) and the California Attorney General’s Registry of Charitable Trusts (AG/RCT). These forms are due 4 ½ months after the end of your fiscal year. It sounds complicated but what it means is that if your fiscal year ends on June 30th, then your tax forms are all due by November 15th. If your fiscal year ends on May 31st, then your forms are due by October 15th.
So now that we know that you have to file and your tax filings are probably due soon, let’s talk about a really important term: gross receipts. In general, your PTA’s gross receipts will be the total of all the income you’ve received during the fiscal year from all sources less the portion of your membership dues which are forwarded to your Council or District. Think of it like this:
(All Income) – (Membership Dues forwarded to Council/District) = Gross Receipts
Now let’s talk about the three forms you need to file…
IRS 990 Series
There are three versions of this form: 990N, 990EZ and 990. If your PTA’s gross receipts were less than $50,000 AND your PTA’s gross receipts are usually less than $50,000 then you can file the 990-N electronic postcard. (“Usually less than $50,000” means that the average gross receipts over the past three years is less than $50,000.)
If you can’t file the 199-N, then your PTA will need to file either the 990 EZ or the 990, depending on your PTA’s gross receipts and total assets. These are longer and more complex forms and California State PTA strongly encourages any PTA required to file the IRS 990EZ or 990 to seek professional assistance from someone who is experienced in filing non-profit tax returns.
CA FTB 199 Series
There are two versions of this form: 199N and 199. If your PTA’s gross receipts were less than $50,000 AND your gross receipts are usually less than $50,000, then you can file the 199N online.
If your PTA is not able to file the 199N then you need to file the longer 199 form. California State PTA strongly encourages any PTA which is required to file the 199 to seek professional assistance from someone who is experienced in filing non-profit tax returns.
AG/RCT Charitable Trust Renewal Form (RRF-1)
This form is required by the California Attorney General’s Registry of Charitable Trusts. There is only one version of the form, however you may file it online via the AG/RCT’s Charity Registration Online Renewal System. (Please note that this system requires you to request a user ID before you can use it.) If you prefer to file a paper RRF-1 form, it is recommended that you send it via certified mail. If your PTA’s gross receipts were more than $25,000, you will also need to mail a check with your form or submit an electronic payment via the AG/RCT’s Charity Registration Online Renewal System.
In general, the answers to questions 1 through 9 are usually “NO” unless you used a commercial fundraising company or held a raffle. Please be aware that the semi-annual audits required of every PTA are NOT considered “audited financial statements” within the meaning of question 9. If you answer “YES” to any question, be sure to include an attachment with the required additional information. Incomplete forms will be rejected.
In addition, if your PTA files an IRS 990EZ or 990, you must include a complete copy of your IRS tax filing with your RRF-1 form. The AG/RCT’s Charity Registration Online Renewal System allows for IRS filings to be uploaded as PDF files.
A Couple of Important Notes
If your PTA is going to pay a professional to prepare and file your taxes, please make sure that they are experienced in filing tax returns for non-profits. It’s even better if they’re experienced in filing tax returns for PTAs. Just as you wouldn’t take your car to a bicycle repair shop, you shouldn’t take your taxes to a professional who has never filed for a non-profit before.
Even if your PTA is filing the e-postcard versions of the IRS and California forms, you can seek professional assistance. This is a legitimate expense and you are not “wasting” money by paying a professional when necessary. Remember that it is not the Treasurer’s job to file the PTA tax returns. It is the Treasurer’s job to ensure that the tax returns are filed.
If you have questions or need help, please contact your council or district treasurer or visit the California State PTA’s Tax Filing Support Center https://capta.org/pta-leaders/services/tax-filing-support-center/. All tax forms and links to online filing sites can also be found at the Tax Filing Support Center link above.