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Q&A

Deposit School funds in PTO account

Is it legal to accept funds raised by the school (for a school promoted program) for a temporary deposit in a PTO bank account. The amount deposited and withdrawn will be identical and the deposit will reside at the PTO account for less than 30 days.
- KayZee

I think so: if it's something that fits your exempt purpose (supporting the school), then this should be fine. Our PTO has done this for the school chorus (checks for the t-shirts were mistakenly made out to the school rather than the town/district, and the PTO could deposit them and write one check to the vendor) and for the Pennies for Patients drive.
- gjcoram
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Thanks for the quick reply, gicoram! I thought so, too... It is always so reassuring to hear that others have experienced similar situations. -- KayZee
- KayZee
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We've done it, but are trying to get away from it because it's our understanding that any deposits we put in our account (minus any amounts that were the initial cash box for an event) count as income on our taxes. The state treasurer for our state's PTA told me this. The example she gave was a deposit after a Scholastic book fair. Even though all of it goes right back out to Scholastic, that amount counts as income on our taxes.
- betheranne
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It's true that that income should be listed as "gross income" on your Form 990(EZ) -- and the expenses should (I expect) be listed as "program service expenses" since it's to pay for a school program. In our case, it's not a lot of money, relative to our total budget, and it doesn't put us over any thresholds (eg, if you make more than $100k gross, you used to have to file 990 instead of 990EZ, but I think that threshold has gone up; in Massachusetts, you have to have a CPA audit your reports if your income is above $200k). So I wouldn't worry about it counting as income. (Does the State PTA charge you different rates for membership based on your income?)
- gjcoram
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