If you agree to run the money through the PTO, then they effectively become the PTO's classes, not the teachers. So first you have to figure out if that really fits into your mission statement. If it doesn't, then I wouldn't do it.
If it does, then you need to look at the structure of the classes and put in some procedures for taking registrations and determining which classes are offered. You are going to have to record the revenues and the expenses on the PTO's financial statements. If you are letting the teachers design the curriculum for the classes on their own, with very little input from the PTO, and you structure the payment as a flat fee per class per child (like $100 for a 6 week session, or something like that), then you could probably get away with paying the teachers as independent contractors. It is then the PTO's responsibility to track those payments on a calendar year basis and issue 1099s at the end of the year to the teachers as appropriate. (You should do some research on the IRS requirements to be treated as an independent contractor instead of an employee--there's info on the IRS website.) To be on the safe side, I would also get the principal to sign off on the procedures to pay the teachers.
If you are looking for a way to just funnel the money through the PTO and not have to record it on the financial statements--there isn't one.
Thanks for the answer. We do not run any other after school activities. Teachers can receive money from after school classes. They have always funneled their money through the school district and given the PTO a small percentage of it as a gesture of goodwill. However, now they have their own insurance and don't need the school district's insurance so they are wondering if they can start sending payments through the PTO instead of having parents make checks out to the teachers directly. I think the request has been made for two reasons - one, ease of distribution, and two, to help protect them in regard to handling the money. Thanks for your help.
Kind of difficult to answer without more information. What are the teachers trying to protect themselves from? Does the PTO offer other after school programs? What is your district's policy on teachers getting money from other sources?
Our PTO ran a variety of after school programs, and in some cases teachers were the instructors. But because of district policy, the school had to pay them for their time at a certain pay rate, and then we reimbursed the school for the pay.
Keep in mind that whenever you pay teachers directly, assuming these are pretty substantial dollar amounts, the PTO will probably have to issue 1099 tax forms to the teachers at the end of the year
Some teachers at our school offer after-school activities. In order to protect themselves, they would like to have parents make checks out the PTO and have us distribute the money to them. Basically we would be providing a bank account to deposit to and nothing else. Is this legal? Thank you.
