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Is Incorporation Required?

5 years 9 months ago #172800 by Cheryl PTO Today
Replied by Cheryl PTO Today on topic Is Incorporation Required in Iowa?

We have insurance packages that can accommodate your needs, our Entry package includes a Plus Membership, General Liability and Accident Medical for $399. The Plus Membership includes the Start-up guide which will walk you through the 501c3 process and incorporation! Here is a link feel free to reach out to me I can answer your questions and go through our insurance packages with you. This email address is being protected from spambots. You need JavaScript enabled to view it.!
5 years 9 months ago #172786 by GrimesPTO
We recently were informed by our school district's Business Manager that we cannot use the tax id number or the exempt status we have used for years through the school. Every PTO in our district uses that number, so it was a bit of a shock for us. We have started looking at 501c3 but he told us we'd need to incorporate and maintain liability insurance, which would be upwards of $3,000. It surely cannot cost that much to get tax exempt status for a PTO, can it?
7 years 3 months ago #171768 by lharac
Replied by lharac on topic Is Incorporation Required?
Hi, PTOMOM2016! Congrats on taking this step to formalize your organization!

The short answer is: You do NOT need to be incorporated to apply for 501(c)(3) status. 501(c)(3) is a federal designation that your group is exempt from paying federal income tax. Incorporation is a state-level designation that indicates how your organization is formed as a legal entity. The way you prove to the IRS that you have been in existence for the past few years is by filling out the application with your historical information (financial, mostly) for the years in question.

Here's the longer answer: Why not go ahead and incorporate first? It's a pretty short application in New York State. There is a $75 filing fee, but it then makes you eligible to receive state and local tax exemptions (income, sales, and use taxes) -- so it's a good investment for the long term. And, it will make it easier to fill out your 501(c)(3) paperwork because you won't have to include the historical financial info -- you will be a brand-new organization with no history in the eyes of the IRS as of the date of incorporation.

Here are some links to help you:

Tax-Exemption and Nonprofit Status: What PTOs Should Know -- This article explains a few key terms and walks through the steps to incorporate and file for federal tax-exempt status.

How To Form a Nonprofit Organization in New York State -- This is info from that outlines the steps for your state.

Not-for-Profit Corporations FAQs -- This is on the website for the New York State Department of State, Division of Corporations. If you click on the "more" link in the question I linked to, it has links for the fillable online incorporation application as well as instructions.

Good luck!

Lani @ PTO Today
7 years 3 months ago #171764 by PTOMOM2016
Hi we are in New York. Our small PTO was formed 4 years ago. I've been truing for 6 months now to complete the 501 (c)3 application for us. BUT I am so confused with needing to be incorporated or not. How do you show the IRS when you were formed if you are NOT incorporated? We need the 501 (c)3 desperately as we are so small and have little to no parental support. I cannot lose the $250 if I do the application incorrectly as we are so limited in funds. Please someone advise me-do I need to do the incorporation? That would give us a new formation date & make me wait another 2 years to apply. How do we prove we were in existence for 4 years & still get the 501? Thank you!
11 years 5 months ago #162548 by Wilson West PTO
Resurrecting a very old post - does anyone know if the laws have changed in PA? Should we incorporate now? I would love to share ideas with anyone going through this process in PA.
16 years 4 months ago #141239 by JHB
Replied by JHB on topic RE: Is Incorporation Required?
If your parent group operates as an sub-entity under the school's umbrella - similar to that of a specialized committee - then, yes, you use their designation as a governmental or non-profit entity (if it is one).

Whether they have formalized their structure or not, the majority of parent groups seem to consider themselves independent. And many school districts will not allow the parent groups to be considered part of their structure, use their status, or reference the school's tax ID number for tax exemption.
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