PTOs that raise and spend money are subject to IRS regulations. Understanding your organization's tax status helps protect your PTO and ensures your community's donations are used effectively.
Important Reminder
Each PTO is a separate legal entity from ICCSD. The district does not file taxes on behalf of PTOs. Individual PTOs are responsible for their own IRS compliance.
Do we need tax-exempt status?
Most PTOs benefit from obtaining 501(c)(3) tax-exempt status from the IRS. This allows donors to deduct their contributions on federal tax returns and opens eligibility for grants and corporate matching
programs.
To apply, your PTO must have an Employer Identification Number (EIN) and file IRS Form 1023-EZ or
the full Form 1023.
Annual IRS filing requirements (Form 990)
Even tax-exempt organizations must file annually with the IRS. Which form you file depends on your gross receipts:
- Gross receipts ≤ $50,000: File Form 990-N (e-Postcard) - free and quick online.
- Gross receipts $50,001–$200,000: File Form 990-EZ.
- Gross receipts > $200,000: File the full Form 990.
Failure to file for three consecutive years results in automatic revocation of your tax-exempt status.
Employer Identification Number (EIN)
Your PTO needs its own EIN - separate from the school's to open a bank account, apply for tax-exempt status, and file returns. Apply for a free EIN online at IRS.gov in minutes.
Iowa state requirements
In addition to federal requirements, Iowa PTOs may need to register with the Iowa Secretary of State as a nonprofit corporation and apply for Iowa state sales tax exemption through the Iowa Department of Revenue.
Fundraising & record-keeping tips
Keep detailed records of all income and expenses, including receipts for purchases over $75. For donated goods or services valued over $250, provide written acknowledgment to donors. Maintain minutes of meetings and financial records for at least 7 years.
