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 non-profits, including PTAs, have tax forms that they have to file every year. Fortunately, California State PTA has resources to make this easier for everyone and Twenty-Fourth District PTA is here to help you as well. Tax forms, instructions and links to various government agencies can be found at CAPTA’s Tax Filing Support Center:
EVERY PTA in California is required to file three tax forms each year. The three forms are the IRS 990, the CA 199, and the RRF-1 Charitable Trust Renewal. These forms are due each year by the 15th day of the 5th month 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.
It is important to note that the IRS, the Franchise Tax Board and the California Attorney General can penalize your PTA for failing to file your tax forms on time. These penalties may include fines, fees, and/or temporary suspension or permanent revocation of your non-profit status. Failure to file tax forms may also result in your PTA being listed as “not in good standing” by California State PTA or losing your PTA charter.
So now that you know that 1) you MUST file and 2) your tax filings are due in November, let’s define 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 the District, State, and National PTA. Think of it like this: (All Income) – (Membership Dues paid to District) = Gross Receipts
***If you use a fundraising company (Apex, Get Movin Crew, etc.) ALL the funds you raise must be counted as income, even the portion you pay to the fundraising company!***
Your PTA’s gross receipts are what determines which tax forms you have to file and whether or not you have to write a check to the Attorney General’s Office when filing your RRF-1. So be sure you have that number before you start filing tax forms.
Now for more specifics about each of the three forms you are required to file…
RRF-1 CHARITABLE TRUST RENEWAL FORM
This form is required by the California Attorney General’s office from every non-profit organization in California. You may file a paper version of this form or (new this year) you may file it online. If you wish to file the paper form, you will need to fill it out completely, print it, sign it and mail it certified to the Attorney General. If your PTA’s gross receipts were more than $25,000 for the 2016-17 fiscal year, then you will also need to mail a check with your RRF-1 form. If you wish to file the RRF-1 online, you will need to complete a multi-step process the first time you file. First you must ask the AG’s office for a “renewal ID”, then with that in hand you have to create a login and password & answer some security questions. Only after that can you file the online form. To get started with the online version, visit the AG’s Charity Registration Online Renewal System here: http://rct.doj.ca.gov/eGov/Login.aspx Two important notes about the online system: 1) you still have to pay the filing fee if your gross receipts are over $25,000 so be sure to follow the AG’s instructions for this exactly and 2) the online form asks for the same information as the paper form, but in a different order so pay careful attention to what info goes where.
Regardless of how you file the RRF-1, you will have to answer the same questions. In general, the answer to questions 1 through 9 is “NO”. Question # 5 asks about whether you used a commercial fundraiser. Companies like Genevieve’s or Great America or J. Carroll (where you are selling products/material goods) are not usually considered commercial fundraisers as defined by this question. A company like Apex is a commercial fundraising company by this definition. For Question #7, unless your PTA held a raffle (not a prize giveaway or opportunity drawing) but an actual raffle with a permit from the state Attorney General’s Office, then the answer to this question should be “NO”. Question # 9 also confuses people- the audits required of every PTA are not considered “audited financial statements” within the meaning of this question. Unless your PTA hired an Auditor or CPA to conduct your audit and they gave you an “audited financial statement”, then the answer to this question is also “NO”.
The CA 199 form is the tax form required by California’s Franchise Tax Board (FTB) from all non-profits in California. There are two versions of this form, the longer 199 and the shorter electronic postcard (199N). If your PTA’s gross receipts were less than $50,000 in 2016-17 and your gross receipts are usually less than $50,000 then you can file the simpler, faster 199N. So what does “usually” mean in this context? It means that the average of your gross receipts for the last three years must be less than $50,000.
If your PTA is not able to file the 199N because your gross receipts are more than $50,000, then you need to file the longer 199 form. This is a paper form that may be submitted by mail or electronically by a tax preparer or CPA. California State PTA and Twenty-Fourth District encourage any PTA which is required to file the longer, non-postcard versions of these tax forms to seek professional assistance in doing so from a professional who is experienced in filing non-profit tax returns. Please note that PTAs are not required to pay the $10 filing fee for the 199 form. The only form you may have to pay to file (other than the cost of hiring a tax preparer if necessary) is the RRF-1.
The IRS 990 is the tax form required by the Internal Revenue Service from all non-profits in the United States. There are three versions of this form. Once again, if your PTA’s gross receipts were less than $50,000 in 2016-17 and your PTA’s gross receipts are usually less than $50,000 then you can file the 990N electronic postcard. If you can’t file the 990N, then your PTA will need to file either the 990EZ or the 990. Both are paper forms that can be mailed or filed electronically by a tax preparer or CPA.
If your PTA will not be able to file your tax returns by the November 15th deadline, you must file an extension before that date. If an extension is filed for your PTA, please send a copy of the extension form to our Unit Information officer (see below). At this time, there is no extension available for the RRF-1 form. That form must be filed by November 15th.
If your PTA pays a professional to prepare and file your taxes, please make sure they are experienced in filing tax returns for non-profits. It’s even better if they’re experienced in filing tax returns for PTAs. There are some aspects of PTA tax returns unique to non-profits in general and PTAs specifically. Nobody wants to pay for something not done correctly because your tax preparer wasn’t familiar with it. You wouldn’t take your car to a bicycle repair shop and you shouldn’t take your taxes to a professional who has never filed for a non-profit before. If your tax preparer has questions about filing your return, they may contact Twenty-Fourth District PTA and we will be happy to assist them or put them in touch with someone at California State PTA who can help.
Also, even if your PTA is filing the electronic postcard versions of the IRS and FTB forms, you may still seek professional assistance. This is a legitimate expense and you are not “wasting” money by paying a professional if you feel it is necessary. Remember it is not the Treasurer’s job to file the PTA tax returns. It is the Treasurer’s job to ensure the tax returns are filed.
Please remember copies of all three filings (electronic copies are fine) must be sent to our Unit Information Officer, Carrie White. If you are mailing copies, send them to:
Carrie White, Unit Information Officer
Twenty-Fourth District PTA
5405 Fresno Ave.
Atascadero, CA 93422
If you have questions or need assistance with anything tax-related, please don’t hesitate to contact your Twenty-Fourth District PTA board liaison. Thanks for taking the time to read through all this! And more importantly, for taking the time to make sure all your tax forms are filed correctly and on-time!