Finance
Tax Filing
REQUIRED FILINGS
Your PTA will need to file the following:
- IRS Form 990, 990EZ or 990N
- Franchise Tax Board Form 199 or 199N
- Attorney General’s Office of Charitable Trust Registration Renewal form RRF-1 and the CT-TR-1.
These must be filed by the tax deadline, which is 4.5 months from your PTA’s fiscal year end. NOTE: If your gross revenues are less than $50,000, file the 990N and 199N electronically now. It’s easy!
STEP 1: Annual Financial Report
To prepare to file your taxes, the first thing you need to do is complete the Annual Financial Report (AFR):
- The numbers on the Annual Financial Report will help you complete the tax documents
- If you need assistance completing your Annual Financial Report, please contact your council Treasurer.
- Download a sample Annual Financial Report
STEP 2: Federal Taxes with the IRS
Your PTA will need to file its federal taxes annually:
- If your PTA has gross receipts of $50,000 or less, you can file a 990N electronically
- If your PTA has gross receipts of $50,000 or more, you would need to file a Form 990EZ or Form 990. We recommend you contact a CPA to complete your tax filing.
- For tax years ending July 31, 2021, and later, Form 990EZ MUST be filed electronically. For tax years ending July 31, 2020, and later, Form 990 MUST be filed electronically.
Once you have filed the 990N, 990EZ or 990, go to Step 3. NOTE: The IRS defines gross receipts as “the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses.” Do not include membership dues or founders day contributions that are passed on to council, district and state in this number.
STEP 3: State Taxes with the Franchise Tax Board
Your PTA will need to file its state taxes annually:
STEP 4: Charitable Trusts with the Attorney General
Your PTA will need to file an RRF-1 and the CT‑TR‑1 with the Attorney General’s Office of Charitable Trust annually. Once you have filed all taxes, this is the last step:
- Complete the Registration Renewal form (RRF-1)
- To assist in preparing your RRF-1 download the annotated RRF-1
- Complete, print and mail RRF-1.
If gross annual receipts are normally $50,000 or less and your PTA filed a 990N, form CT-TR-1 is also required.
- Complete the Treasurer’s Report form (CT-TR-1)
- To assist in preparing your CT-TR-1, download the annotated CT-TR-1
- Include lists of Other Assets, Other Liabilities, Other Revenue and Other Expenses (if applicable)
- Complete, print and mail CT-TR-1 along with form RRF-1
NOTE: Don’t forget to include your fee and a copy of your PTAs Form 990EZ or 990. If you filed a 990N a copy of the confirmation is not required. Also, if you filed for an extension (Form 8868) with the IRS, you are also granted an extension for the RRF-1.
Financial Reviews
Forms
- Download the Financial Review Checklist.
- Download the Financial Review Form.
Your bylaws state that you should be conducting twice yearly financial reviews of your financial records. For most PTAs that means you have a mid-year financial review coming up (double check your bylaws if you are not on a July 1- June 30 fiscal year). A financial review is required by both our insurance company and the California Attorney General’s office to ensure that PTA funds are being spent on things that the association has approved and that the money is being accounted for correctly and transparently. Failure to perform these reviews can result in the insurance company not paying claims if theft or mismanagement of funds is suspected.
A PTA financial review is not a true audit. It is a review of financial procedures and records but does not fall under GAAP (Generally Accepted Accounting Principles) rules and regulations.
Who can perform the financial review?
Our insurance company requires a qualified accountant to perform the Financial Review but only if they are going to do it without a Financial Review committee to double check their work. AIM defines “qualified” as someone who has been professionally trained/licensed to perform audits such as a CPA or other professional accountant. They do not need to be currently employed in the field. A bookkeeper/bank employee is generally not trained to do auditing.
A person who is not a qualified accountant may still be the Financial Reviewer. Their findings must be reviewed by a Financial Review committee. Your Financial Review committee can be made up of a combination of non-check signers and check signers as long as the majority are non-signers. The treasurer/financial secretary should not be a member of the committee as you cannot audit your own books.
The financial review committee appointment (and the Financial Reviewer appointment if not elected to the position) must be ratified at the first general association of the year and their names should be recorded in the minutes.
What is the Financial Reviewer reviewing?
As the Financial Reviewer, you will use the Financial Review Checklist to examine both the treasurer’s books and those of the financial secretary (if you have one). You will markoff items as you review them and make notes of any missing items. You will add up the total income and disbursements and fill out the Financial Review Form. Make sure you are adding up the actual deposit slips and check requests (and checking receipts) to come up with your totals, and that you are not just going by what it says on the bank statements.
Once you are done, present the report and any findings that need to be taken care of to the executive board if you are a qualified accountant (or to the review committee first if you are not). Once the committee and board have approved it, you will present it to the general association at your next meeting. Copies of the report should be uploaded to MyPTEZ for safekeeping.
Letter of Determination
What is a Letter of Determination?
A Letter of Determination is proof that a PTA is a constituent organization of the California State PTA. It is a packet consisting of:
- A 2-page document received from CAPTA that provides evidence of the PTA’s tax-exempt status as a nonprofit, subordinate organization of PTA California Congress of Parents, Teachers and Students, Inc. (AKA California State PTA). This letter also includes the unit’s EIN (Employer Identification Number). The letter of determination should be filed with the PTA’s permanent financial records.
- Letter from the California Franchise Tax Board
Why is a Letter of Determination needed?
- To open a bank account for a 501(c)(3) nonprofit
- For some donation and grant applications
- To prove the PTA's tax-exempt status
When is the Letter of Determination provided?
A newly organized unit receives a Letter of Determination packet upon its acceptance as a new unit by the California State PTA Board of Managers. A “tentative/pending” Letter of Determination is sent to the unit upon receipt in the California State PTA office of the new unit application packet (which should be sent to the state PTA office within two weeks of organizing). This is the Letter of Determination that a unit can use to open a bank account.
Who requests the Letter of Determination?
Usually the PTA president or treasurer requests a Letter of Determination from the California State PTA office; however, a district PTA may request a Letter of Determination for a unit. The state office always sends the letter directly to the PTA president. Public disclosure laws require that the Letter of Determination be given to anyone who requests it. Such requests are directed to the president or treasurer of the PTA in question. The district PTA should not keep Letters of Determination on hand nor should the district or council provide a cover letter indicating a unit is in good standing. Only the California State PTA can verify PTA status.
Where does the California State PTA office send the packet?
The California State PTA office sends the packet to the PTA president. The PTA president should provide it to anyone who requests it.
TIP!
Have your president or treasurer obtain your letter of determination at the beginning of each year.
Insurance
California State PTA is committed to ensuring you have the best possible insurance coverage and service to protect your unit and your members. Our insurance broker is AIM (Association Insurance Management Inc.), which works to ensure that our PTAs are receiving the best coverage for their premium costs. Coverage features include:
- Broad coverage for events without the need for underwriting or additional premium on a case-by-case basis
- $1 million limit per PTA for Directors & Officers’ coverage
- Under General Liability, fire damage coverage of $1 million
- No to low deductibles on all included coverages
- Additional activities such as certain types of inflatables, bounce houses, and carnivals are included in the standard coverage; however, please consult and follow California State PTA guidelines as outlined in the Toolkit and the Insurance Guide and your school district policies.
- Property insurance for items in PTA storage or rental equipment may be purchase for a small additional cost, contact AIM for details.
Download the 2025 Insurance Guide (English | Spanish) to learn more about how California State PTA provided insurance protects your PTA.
Check out our Insurance page for more information.
Sponsorship Guidelines
The law permits a non-profit organization such as PTA, without payment of income taxes and without risking loss of tax exemption, to receive corporate sponsorships. To learn more about sponsorship versus endorsements, click here.
Follow PTA’S Noncommercial Policy
- Do not make a qualitative judgment on the sponsor’s products or services.
- Do not include comparative language or language that implies good quality in the acknowledgment.
- Do not permit the sponsor to write the acknowledgment of thanks.
- Do not ask your members or the public to buy the products or services of the sponsor.
- Do not advertise a product or service.
- Do not endorse a product or service.
Acceptable Acknowledgments (Good Word)
This includes the transmission or display of a sponsor’s logos and slogans that do not contain comparative or qualitative description of its products and services. It may include sponsor locations, telephone numbers, and value-neutral description of a sponsor’s product line or services.
Unacceptable Acknowledgments that include advertising (Bad Word)
To the extent that the acknowledgment exceeds mere identification and, instead, promotes the sponsor’s product or services, the recognition may instead be treated as advertising rather than an acknowledgment. Price information would generally be treated as advertising rather than acknowledgment. Any inducement to buy, sell, rent, or lease a sponsor’s product or service would likewise be treated as advertising rather than donor acknowledgment.
Permissible Activities
- Give the corporate sponsor an acknowledgment of thanks in return for the donation.
- Identify the sponsor’s name, a picture of their product, an address, phone number, web page.
- Include the logo or slogan of the sponsor for example: “Ford, Where Quality is Job One” or “Ford, Makers of Lincoln Mark VII”.
- Provide free product samples. For example, it is acceptable to have a banner which states, “Pepsi: Valued sponsor of the California State PTA Convention – free samples at Booth 56″
Prohibited Activities
- Do not include any comparative statement such as, “MCI is better than AT&T!” or “Chevy: Best Car in America!”
- Do not call for someone to purchase a product. For example, “List your home with Century 21 today!” or “Wells Fargo: Open an account today!”
- Do not hang a banner which states, “PTA hates Coca-Cola and loves Pepsi.”
SOURCE: March 2007 issue of the California State PTA publication, “The Communicator”.
Financial Training Calendar
- Sept 8 - Treasurer Report & Bank Reconciliation
Register HERE - Oct 13 - Tax Filing <$50K
Register HERE - Nov 10 – FutureFund Connect
Register HERE - Dec 8: Preparing for Mid-Year Review
Register HERE - Jan 12 – Worker’s Compensation
Register HERE - Feb 9 – Recording Memberships properly
Register HERE - Mar 9 – Hot Topics/Q&A
Register HERE - Apr 13 – Year Wrap Up / Start a New Year
Register HERE
Check your PTA email, our calendar, and IG posts for specific times and details.
Important -- Did you get a Letter from the IRS or Attorney General's Office?
If your PTA receives any correspondence from the IRS or the California Attorney General’s Office...
Please contact your Council immediately. Do not respond to the letter on your own.
Your Council leadership will help review the notice, guide you through the next steps, and connect you with Fourth District or CAPTA support if needed. Reaching out right away ensures the issue is handled correctly and in a timely manner.