rac76 - be careful using the phrase, "since we are tax-exempt, we don't declare it...". Technically, if your PTO is a 501c3 group, and you are filing the IRS Form 990/990EZ each year like a 501c3 must, you really are declaring the expense since the 990/990EZ is a disclosure of all your in's and out's for the year. The IRS doesn't assess income tax on a 501c3, but the information is reported on the form nonetheless.

Maybe you mean your group isn't filing the Form 990/990EZ. Many PTO's (and other organizations) operate informally, without notice to the IRS. So, there would be no form to file since the IRS doesn't know you exist. As your organization matures and your members become aware of the responsibility and benefits of becoming a real 501c3, you will want to consider applying. At that time, your PTO will be required to file the annual "tax" return form (990/990EZ), but to repeat, there's no federal income tax due.

For our PTO, we give the teachers a start up check every new school year. Its $50 for full time teachers and staff, and $25 for part-timers or para-pros. So this year's total is $3500. Since we are tax-exempt, I don't think that we declare it. I don't think that the teachers declare it, either.

*Edited** to clear up a sentence!

[ 06-02-2006, 02:52 PM: Message edited by: rac76 ]

its considered INCOME when received, and a DEDUCTION when used for SCHOOL SUPPLIES. maybe ask a professional/CPA if you need the final word.

Would this not be a gift? Do any of you claim christmas or birthday gifts on taxes?

i THINK that teachers who receive cash or check amounts, must declare it (technically speaking) on their income tax form,,,BUT when they use it up for class supplies, they can then deduct it from the tax return of the yr in which they use the $$$$. so its a zero sum game for them. of course, is the IRS going to check if teachers declare every $100 they get from PTOs,,,,,,but hey we trust our teahcers to do whats right, dont we,,,,after all they are teahcing our kids 6hr a day and if we can trust em with our 9mos gestation results (and or adoptions etc) we can trust em with few bucks....and should. but then, i am not PTO treasurer or even an officer, just an observer.

My group allocate Teacher Reimbursements at the rate of $100 for each teacher (classroom and otherwise) and $50 for each aide. We require reciepts and reimburse them at face value up to the total of their allocation. We've been doing it for so long that most teachers anticipate it and hang on to any reciepts from purchases made over the summer.

We once had a member ask if we needed to collect reciepts or if we could just give the full amount as a 'gift'. Our treasurer didn't even have to answer out loud. The look on her face said it all!!!