Tax Filing Information and Other Money Matters
This page addresses Federal, and IF applicable State, income filings along with other money matters: exemption from State Sales tax, fundraising management, and registration requirements of the Minnesota Attorney General. If you have additional questions after reviewing the below information, please feel free to reach out to MNPTA by contacting us at firstname.lastname@example.org, Or the Minnesota PTA Treasurer at Treasurer@mnpta.org
Filing Federal 990 Tax Forms
Your local PTA is considered to be tax exempt under the distinction of 501(c)3 status with the Internal Revenue Service. Local PTA units do not have to file form 1023 in order to obtain this status because affiliation with Minnesota PTA results in a group exemption privilege. However, subordinate organizations (local PTA units) are required to submit their own federal and, based on circumstances (see below), sometimes state tax filling forms.
The State of Minnesota relies on the Federal Form 990 to perform charitable and other regulatory oversight and to satisfy state income tax filing requirements for organizations claiming non-profit exemption from Minnesota state income tax. There are some exceptions to this which are further discussed below (refer to MN Department of Revenue Additional Filings).
Tax filing must be completed by the fifteenth (15) day of the fifth (5) month after the close of your fiscal year. (Look here for the IRS Calendar) Local Units need to adopt a fiscal year consistent with MNPTA and National PTA, starting on July 1 through June 30 of the represented school year. If your Unit’s fiscal year is in conflict with this, you will need to contact the IRS directly and ask for assistance in updating your records to be consistent with the June 30 fiscal year end date.
Annual IRS information returns include Form 990, Form 990-EZ and Form 990-PF and Form 990-N (e-Postcard) which is an annual notice. Most of our local units will qualify for the 990-N filling having annual gross receipts of $50,000 or less (see below).
If your unit has annual gross receipts of more the $50,000; we recommend that you contact a tax professional to aid your unit in determining the requirements of your 990 filing. More information on filing requirements can be found on the at: IRS website.
For detailed information on managing a tax-exempt organization including, how to maintain your status, how to handle contributions, and more, you can refer to the IRS publication “Tax-Exempt Status for Your Organization” (click to open).
990-N Filling for Units with Gross Receipts $50 K or less
Those local PTA Units with annual gross receipts of $50,000 or less may file the simple 990-N or e-postcard. Below is a sample of what the filing may look like, along with a list of information you will need to file.
A direct link to the IRS e-filing website can be reached by clicking: 990-N: Electronic postcard Before completing the e-Postcard, you will need to have access to the eight items listed below:
- Employer identification number (EIN), also known as a Taxpayer Identification Number (TIN).
- Tax year (Local Units need to adopt a fiscal year consistent with MNPTA and National PTA, running from July 1 through June 30 of the present school year). fiscal years
- Legal name and mailing address (Please confirm the legal name of your unit prior to filing. If there are questions, MNPTA should be able to provide you with the most accurate information)
- Any other names the organization uses (Same: DBA or Doing Business As listings)
- Name and address of a principal officer (Usually Treasurer or President)
- Web site address if the organization has one
- Confirmation that the organization’s annual gross receipts are $50,000 or less (A final budget summery kept with your units local records will suffice).
- If applicable, a statement that the organization has terminated or is terminating (going out of business) – Prior filling such, be sure to contact MNPTA and discuss options procedures for disbanding your Local Unit PTA.
Be sure that once you have filed your 990-N, you send a copy of the IRS verification of your 990 submission to MNPTA. Also keep a copy for your records. Annual proof of e-card filing is one of four requirements to keep your local unit in good standing with both MNPTA and National PTA. (See web page Local Units in Good Standing).
MN Department of Revenue
Units Required to File Withholding with the State of Minnesota
As noted above, the State of Minnesota relies on the Form 990 filings to perform charitable and other regulatory oversight which satisfy state income tax filing requirements for organizations claiming exemption from Minnesota state income tax. This mean, your Unit is NOT required to file a specific State of Minnesota Income Tax Form in addition to your Federal 990; however, some exemptions apply.
If your local unit is required to process withholding, you will be required to file with the Minnesota Department of Revenue. This would apply if your local unit hires an employee. This would NOT apply in the case of an individual contractor or an intern receiving some sort of minimal stipend under $500 for the fiscal year (e.g.: babysitting services during a PTA meeting). There may maybe a few other rare instances in which state withholdings will apply. To determine if your unit is required to file withholding please refer to the MN Department of Revenue What Is Withholding Tax Web Page
Filing for Exemption from State of Minnesota Sales Tax
Your PTA Unit, as a 501c(3) non-profit, is eligible to apply for exemption from sales tax in Minnesota. Savings can be significant for units purchasing supplies for fundraising projects, student activity, or supporting administrative needs. Each unit wanting to avoid the need to pay sales tax is required to apply individually for exempt status (Form ST16), and to supply proof of exemption to sellers (Form ST3). More details are below.
Has Your Unit’s Minnesota Sales Tax Exemption Status Been Revoked?
In 2017, the State of Minnesota overhauled and cleaned up their sales-tax-exempt database. A new seven (7) digit number has been / will be assigned to all Nonprofits that respond and update their status. If your local unit is using a five (5) digit number starting with EN, the number is now considered invalid and your tax-exempt status has likely been revoked. However, you do have until March 5, 2019, to reverse the status of revocation. The easiest approach would be to contact the MN Department of Revenue directly, explain the situation, and ask them to walk you through your options. This can also be addressed through the Minnesota Department of Revenue Website.
Being exempt from federal income tax does not automatically mean an organization is exempt from sales and use tax in Minnesota. To obtain a sales tax exemption your local unit will need to apply to the Minnesota Department of Revenue for authorization (Nonprofit Exempt Status), using Form ST16. Your local unit must apply individually for the state’s sales tax exemption by submitting documents and meeting all requirements specified below:
- A copy of the organization’s federal 501(c)(3) letter granting exemption from income tax
- A copy of Federal Form 1023 submitted to the Internal Revenue Service (please contact MNPTA to discuss obtaining this information)
- A signed copy of the organization’s Articles of Incorporation or Constitution and Bylaws containing the following statements (again, you can turn to MNPTA to aid you in providing this information and find these documents on the MNPTA website):
- The organization is nonprofit
- The organization is operated exclusively for charitable, religious, or educational purposes
- The earnings of the organization do not benefit any private shareholder or individual member
- The organization must not attempt to influence legislation
- A dissolution statement
- A letter from the principal of the school indicating the organization’s affiliation with the school
The MN Department of Revenue requests up to 90 days to process any applications for exemption status.
After your PTA is approved for tax exemption with the state, you will need to supply the businesses you work with (sellers) a completed Form ST3. This form will be used by your sellers to properly apply your tax exemption to your purchases. However, some specific purchases do not qualify for Exempt Status in Minnesota; they include the following:
- prepared food, candy, soft drinks, and alcoholic beverages, including catered food
- gambling equipment and supplies
- purchases, leases, and rentals of most motor vehicles
- 9.2 percent car rental tax and 5 percent car rental fee
- waste collection and disposal services
There are three things that may trigger your local unit needing to file with the Minnesota Attorney Generals (AG) office. Failure to file annually will result in a $50 penalty against your unit, unless you contact the AG and confirm your triggered status has changed and you are currently exempt from the requirement. Your local unit WILL need to file with the AG if you do any of the following:
– Collect over $25 K in non-taxable donations within one fiscal year – (sample donation request letter coming soon)
– Hire paid staff – please note definition listed under State of Minnesota withholdings above.
– Hire a professional fundraising group (this can include a “Color Run” sponsor or the like) to solicit contributions (more below).
If your Local PTA Unit hires a professional fundraiser to manage and facilitate a fundraising activity or event (e.g.: A color run organization or similar professional group) you will be required to complete the annual filing. This does not apply to organizations (sellers) that may help you sell clothing or school specific swag through their website, or to groups like General Mills Box Top for Schools program. Currently, GiveMN.org is not considered a “professional fundraising” group for the purpose of this required filing. However, local units should be aware that this status could change in the future. For a copy of the filing form, please click on the link above. For more information or specific questions, please refer to the Minnesota AG website.