Starting a Parent Teacher Organization (PTO) is exciting — it allows parents, teachers, and administrators to work together to support your school’s students. But forming a PTO the right way involves legal and tax considerations. If you skip steps, your PTO could face delays in fundraising, liability risks, or problems qualifying for tax-exempt status.
At Cullinane Law Group, we guide schools and parent leaders through every step of forming a compliant, tax-exempt PTO — so you can focus on your mission without legal headaches.
What is a PTO?
PTOs are nonprofit organizations formed by parents, teachers, school staff, and/or community members to support a local school. Whether it is recruiting volunteers to help at the school or fundraising to support programs and activities, PTOs are one way for a community to rally around a school.
PTOs can apply for tax-exempt status from the IRS to aid in their mission of supporting their local school.
What is the difference between a PTO and a PTA?
While similar to a Parent Teacher Association (PTA), PTOs are often local organizations that focus on a specific school. Each PTO is an independent nonprofit corporation and must apply for tax-exempt status.
Each type of organization has pros and cons that groups must evaluate to determine which one is the best fit.
PTA
- PTAs are part of a national network. Local PTAs may pay dues to a national office and may join a national initiative while also advocating for the specific local school.
- PTAs have a broader mission of advocating for children that utilizes statewide and nationwide networks. Local PTAs are able to tap into this network where they have access to numerous resources and partnerships that focus not only on their own local school but also on larger public policy issues that affect children.
PTO
- PTOs generally are not part of a national network and therefore, do not pay dues to a national office.
- PTOs can also focus only on specific issues that relate to their own community and not necessarily on statewide or national policy issues.
- However, PTOs must take a different route to form. Instead of paying dues and applying through a state PTA, PTOs must create a new nonprofit organization (see below).
How do I get started?
Forming a PTO is the same process as creating any type of tax-exempt nonprofit organization.
Steps to Start a PTO
Assemble a Founding Team: Recruit parent and teacher volunteers to serve on your board.
Define Your Mission & Goals: Clarify what your PTO aims to accomplish.
Draft Bylaws & Governance Policies: Establish how your organization will operate.
Incorporate with Your State: File nonprofit articles of incorporation with your state’s Secretary of State.
Apply for Tax-Exempt Status: Submit IRS Form 1023 or Form 1023-EZ.
Open a Bank Account & Begin Operations: Use your EIN and tax-exempt status to manage finances.
- Apply for State Sale Tax Exemptions
While these steps may seem straightforward, mistakes in incorporation or IRS filings are common — and they can delay your PTO’s ability to operate legally. That’s why many PTOs hire experienced nonprofit attorneys.
“As parents, we didn’t know where to start. Cullinane Law handled all the paperwork and explained everything clearly. Our PTO is thriving thanks to their support.” – BPES Board Member
