Question: Cash Gifts for Teachers at a Private School

Hello, I am in the Development Office at a private school in Denver, CO. At the end of the school year, our Room Parents organize a cash gift collection by classroom so that they can give our teachers & assistants in the class one large gift. The money is collected by a Room Parent and then given to the teachers by them. Nothing runs through the school, or our Parent Association. Are there tax implications for our school because of this practice? Thanks for your help.

Asked by carolebaran



Advice from PTO Today

Craig writes:
Assuming your school is nonprofit, then I don't think so. However, this is a little beyond the scope of what we usual look at. I'd suggest talking to the IRS about it or a CPA experienced with tax issues relating to private schools. My guess is that if these collections are gifts to the teachers, to be used as they wish, then there would be tax implications for the teachers. If they are specifically to be used for classroom supplies or another specific purpose benefiting the (nonprofit) school, then there wouldn't be tax implications. But you should definitely check to be sure.

Answer this question: