In NJ, banks require that non-profits have an EIN number AND the approved business registration (as a non-profit corporation) with NJ before they will let you open a bank account. I'm not sure how many other states have this requirement but it did delay our being able to open a bank account by 2-3 weeks.

I have a question, I am new to all of this too and I am not clear on the "formal" federal tax exempt status. I was talking to our principal the other day and asked if we should become 501c3. We use the school's tax exempt number if we purchase anything worth a lot of money, and I have no clue if we have an EIN number. I honestly don't know if anyone knows. Our past president from year's ago says that we are not 501c3, but we raise over $25,000.00 a school year at least. Do we need to be 501c3? I am confused about all the legal stuff. Are we supposed to file taxes or report our fund status? I am afraid that the PTO could get into trouble somewhere down the line if we don't get this resolved. Any help would be greatly appreciated!
Thanks
~B

The EIN is free for the asking. Go to www.irs.gov and download form SS-4.

Yes, your PTO could be independent of the district and many, many PTO's are. But, like pals said, it sounds like your administration doesn't want the PTOs to be independent. You could buck that, but the school still has to support your work (think: allowing you to meet in the school, publicize through the school, send notes home with the kids, etc.) in order for your group to be successful, independent or otherwise.

If your PTO members like the idea of being independent, then you should ask the district if they'd support your PTO getting its own EIN and putting the $$ in its own account. If the money goes into a district-controlled account, you give up your independence. That's no necessarily a bad thing, but you should agree to that arrangement with full knowledge. Whatever you do, get that money out of the personal account.

And if you do become independent, you don't need to apply for formal federal tax-exempt status until your group has at least $5,000 in gross income for 3 straight years. From the sound of it, you're not to that point yet.

Thank you, we are flying by the seat of our pants starting this PTO and I just found this site. The person who opened the personal account tried to open it in the PTO's name but the bank wouldn't let her. I didn't know all we would need is an EIN number. You get that from the IRS, correct?

It is common that districts hold money like this, especially since you are a pto and not 501c(unless your treasurer knows different) you are in reality a part of the district/school. Personally I would also be concern having the money in someone's personal account, this could cause ALOT of negativity for your group if the right parent found this out. Think about it your child sells "candles" for his school, you think the pto gets the funds but the pto doesn't have a account, so it is in Mrs. Doe's personal account where no one has access except her.If you put the money in the district account and then get your 501 can you then get the money out of that school account? I can see where your principal is coming from. Why havent you open a pto account? We applied for our ein number and opened our account a whole year before going 501. You dont need that 501 status to have your pto account, without knowing alot of how things work in your district but going by what you have said it sound like they keep close tabs on the pto's. Why dont you see if you can open your own pto account??

Hi, a little background: We used to be a charter school, became a District magnet school 2 years ago. District fired our principal, we had an interem one last year and got our new one this year. We decided at the beginning of this year to start a PTO. We decided to set up as a 501c3 and our treasurer, who is an accountant, said she would do it. That was back in August. Since then we have had a couple of small fundraisers and have about $1,500. It was being kept in a personal bank account by one of the board, (I know not the best scenario, but it was only supposed to be temporary). Recently the principal expressed some concern over this. We understood, and tried to reach our treasurer to get the status of our 501c3 (she is not the one with the money by the way)-we have gotten no answer. Well, to try and make a long story short the principal brought someone from the district in and when there were only two board members present, said that we must put the money in a district fund. I was not present but the way it was explained to me is that the PTO is part of the district and these are district funds. I am confused, I thought that PTO's are independant and the money is ours, of course raised in support of the school. So you know, our district has an Educational Fund that a lot of the PTO's use to hold their money and it takes care of their tax-exempt and liability issues, I just did not believe that we had no choice in using them. Has anyone heard of a school district having this kind of control over a PTO? And should the principal be this involved in our affairs? There are so many other instances of her micro-managing, but I am not sure if she is justified this time. HELP!