With the passage of House Bill 232, effective July 1, 2013, PTAs will no longer need to charge sales tax when fundraising items are sold or re-sold by PTAs (like gift wrap, pizza kits, or spirit wear), in which funds from sales are deposited into the PTA account and paid out to a vendor (if applicable).
HB0232: “This bill exempts from the State sales and use tax sales made by a parent-teacher organization or other organization within and elementary or secondary school in the State or within a local school system in the State.”
Maryland PTAs must continue to file and report sales and use tax reports indicating $0 in taxable sales as required by the taxing authority. Local PTA units are still required to pay sales tax on items purchased, unless those items will be resold. PTA units with a merchant account and using their own credit card machine must collect, file, and report sales taxes in one of three ways:
1. Issue a Blanket Certificate of Sale (see Cash Encounters) to the vendor in lieu of paying sales tax.
2. Pay the sales tax, then request a refund of that sales tax from the State.
3. Apply for Sales and Use Tax Exemption Certificate. PTA units may not use the school’s exemption certificate. The exemption may be obtained by filing the current year Combined Registration Application.
PTAs must pay sales tax when they buy items for their own use such as in a cultural arts program or for their own office supplies.
PTAs are independent organizations and are not authorized to use the school tax number.
Every local PT(S)A must file an IRS 990 every year; a copy of that 990 filing also must be sent to Free State PTA at email@example.com.
If your local unit had gross receipts of less than $50,000, go to the IRS website to locate the form 990-N, a relatively simple form to complete online by November 15. But if you wish to file the 990-EZ instead of the 990-N, you may do so.
If your local unit had gross receipts of $50,000, but less than $200,000 (more than $200,000 requires a 990), you are required to file IRS Form 990-EZ and the accompanying Schedule A (Schedule B and others as necessary).
Please make sure that your 4 digit GEN code, Block F, is listed as 1999. This code identifies you as part of the Free State PTA group.
WHY: On May 28, 1969, the Internal Revenue Service granted a blanket exemption to all Maryland state, county, and local PTA units under Section 501(c)(3) of the Internal Revenue Code. As a result, donations to your PTA are tax-deductible. If you fail to complete the form, you jeopardize your non–profit status, and will be required to pay income tax on all profits.
DEADLINE: The deadline for filing—990-N, 990-EZ, 990, or Extension—is November 15, 4.5 months after the end of the PTA fiscal year (June 30). A copy of your filing must be sent to Free State PTA via email (firstname.lastname@example.org) by December 15.
TIP: Once your fiscal year has ended on June 30, don’t wait until November 15 to file the required paperwork. You can do it anytime after the fiscal year has ended.
- To use this form, your local unit must have earned less than $50,000 in a year (calendar or fiscal as defined in your IRS organizational documents) (if your local unit earned more than $50,000, you must fill out the 990-EZ).
- STEP 1: Register as a New User
- STEP 2: Create your Form 990-N (e-Postcard)
- STEP 3: Submit your Form 990-N (e-Postcard)
- Once you complete your e-Postcard, click the “Submit Filing to IRS” button.
- Several days after completing the 990, you will receive an email from the IRS stating the 990 has been accepted.
- If accepted, forward that accepted email to FSPTA Secretary at email@example.com as a confirmation of completion.
- To complete the form you must have the EIN.
- If you need assistance contact the PTA Council treasurer.
IRS Form 990-N Update: New Sign-in Process
Beginning August 2022, smaller charities that are eligible and choose to file Form 990-N, Electronic Notice for Tax-Exempt Organizations (e-Postcard), must sign into the IRS modernized authentication platform using either their active IRS username or create an account with ID.me, the current IRS credential service provider.
When accessing the Form 990-N submission page, Form 990-N filers have three options:
- Sign in with their active IRS username: Users with an active IRS username have the option to access the Form 990-N submission page using their existing IRS credentials or they can choose to create a new account with ID.me.
- Sign in with their existing ID.me account: Users that have an ID.me account to access other IRS online services or from a state or federal agency can sign in using their existing ID.me account.
- Create a new ID.me account: Users that don’t have an active IRS username credential must register and sign in with ID.me.
ID.me account creation requires an email address and multifactor authentication. Form 990-N filers who have an existing IRS username and register for an ID.me account must use the same email address.
For Form 990-N filing instructions, see Publication 5248, Form 990-N Electronic Filing System User Guide (PDF).