Treasurer & compliance
Do Booster Clubs Have to File Taxes? A Plain Guide to the Annual Return
Tax-exempt does not mean filing-exempt. Which form your booster club files, when it is due, what happens after three missed years, and how to check your status.
Yes. Almost certainly yes, and probably every single year, including the years the club raised almost nothing. The confusion comes from a reasonable-sounding assumption: the club is tax-exempt, so surely there is nothing to file. Exempt from paying income tax and exempt from filing a return are two different things, and only the first one is true.
Two questions that get muddled
"Are we tax-exempt?" asks whether the IRS has recognized the club as a 501(c)(3) organization, so its income is not subject to federal income tax.
"Do we have to file?" asks whether the club must submit an annual information return telling the IRS what it took in and what it did with it. The answer to the second is yes for practically every exempt organization, and the return is how you keep the answer to the first one true.
Which form your club files
It depends on gross receipts and total assets. Gross receipts means everything that came in before expenses, not what was left over.
| Club size | Form | What it involves |
|---|---|---|
| Gross receipts normally $50,000 or less | Form 990-N (e-Postcard) | Eight items, filed online, no financial detail, no fee |
| Gross receipts under $200,000 and total assets under $500,000 | Form 990-EZ | A short return with revenue, expenses and balances |
| Gross receipts $200,000 or more, or total assets $500,000 or more | Form 990 | The full return |
The $50,000 threshold for the e-Postcard is set out on the IRS page for the Form 990-N electronic filing requirement. The $200,000 and $500,000 figures come from the Form 990-EZ instructions, which state that an organization with gross receipts under $200,000 and total assets under $500,000 at year end may file the 990-EZ instead of the full 990.
Most high school booster clubs sit comfortably in the first row and file the e-Postcard. A club running a large concession operation, holding a facility fund, or fronting cash for a bulk apparel order can cross into 990-EZ territory faster than expected, because gross receipts count everything that came in before any of it was paid back out. Check the figure rather than assuming.
When it is due
The 15th day of the fifth month after the close of your tax year. For a club whose year ends 31 December, that is 15 May. For a club on a school-year cycle ending 30 June, it is 15 November. The IRS publishes the rule on its annual return due date page.
Put it in the club's calendar as a recurring item with a reminder six weeks earlier, and make sure the reminder is not attached to one person's personal calendar. Officer turnover is exactly how filings get missed.
What happens if you do not file
Three consecutive years of not filing results in automatic revocation of tax-exempt status. The IRS describes this on its automatic revocation page, and two details matter:
- It is automatic. No warning letter is required, no hearing, no discretion. Revocation takes effect on the filing due date of the third missed year.
- The club appears on a public list. Which is generally how clubs find out: a sponsor or a grantmaker checks, or a district asks for a current determination letter and there is not one.
After revocation the organization is treated as taxable, donations are no longer deductible to the donor, and grantmakers and corporate matching programs will decline. None of that is dramatic on the day it happens, which is precisely why it goes unnoticed for a season or two.
How to check your club's status right now
- Find the club's EIN on the bank paperwork, an old filing, or the determination letter.
- Search the club's name and EIN in the IRS tax-exempt organization search.
- Check which returns have been filed and for which years, and check whether the club appears on the automatic revocation list.
- If a year is missing, deal with it now. A single missed year is a much smaller problem than a third one.
Do this in your first month as treasurer. It takes five minutes and it is the highest-value five minutes of the role. See the full treasurer's handover checklist.
What if the club was never a 501(c)(3)?
Plenty of booster clubs operate for years as informal parent groups. That is not automatically a crisis, but it does mean the club is not a tax-exempt organization: donations are not deductible, corporate matching will not apply, and grants are generally unavailable.
Getting recognized means forming a legal entity in your state, adopting bylaws, obtaining an EIN, and applying to the IRS. Smaller organizations can typically use Form 1023-EZ. IRS Publication 557 is the full reference on tax-exempt status. Organizations such as Parent Booster USA exist specifically to handle this for school support groups if the board would rather not do it alone.
The filings clubs forget
The federal return is the one everyone knows about. These are the ones that catch clubs out:
- State charitable registration. Many states require organizations that solicit donations to register and renew annually, separately from the federal exemption. Usually the Attorney General or Secretary of State. Start at your state's official site.
- State income or franchise filings. Some states want their own annual return or an exemption application even from federally exempt organizations.
- Sales tax. If the club sells goods, someone has a collection and remittance question to answer, and federal income tax exemption does not answer it. See sales tax on spirit wear and fundraiser merchandise.
- Form 1099-NEC. If the club pays an individual — a clinician, a referee, a trainer — $600 or more in a year, a 1099 is generally required.
- Payroll. If the club pays anyone as an employee, that is payroll tax territory and needs professional help before the first payment, not after.
- Unrelated business income. Income from a trade or business regularly carried on that is not substantially related to the club's exempt purpose may be taxable, and may require Form 990-T. Advertising revenue is the usual trigger. Ask a CPA if the club sells ads.
If status has already been revoked
It is recoverable. Reinstatement means applying again, generally Form 1023 or 1023-EZ, and there are IRS procedures that allow retroactive reinstatement in some circumstances, particularly for small organizations that were eligible to file the e-Postcard. This is the point to involve a nonprofit CPA or attorney rather than working it out from forum posts, because the retroactive route has conditions that are easy to fall foul of.
In the meantime, tell the board, stop describing donations as tax-deductible, and let any sponsor who gave on that basis know. Handling it openly is uncomfortable for one meeting. Not handling it is a problem that grows.
Booster club filing questions
- Do booster clubs have to file a tax return?
- Yes. Tax-exempt organizations must file an annual information return — Form 990-N, 990-EZ or 990 depending on size — even in years when the club raised very little. Being exempt from paying income tax is not the same as being exempt from filing.
- Which form does a small booster club file?
- A club whose gross receipts are normally $50,000 or less can file Form 990-N, the e-Postcard, which asks eight questions and is submitted online at no cost. Clubs with gross receipts under $200,000 and total assets under $500,000 file Form 990-EZ; larger organizations file the full Form 990.
- When is a booster club's tax return due?
- The 15th day of the fifth month after the end of the club's tax year. That is 15 May for a club with a 31 December year end, and 15 November for a club whose year ends 30 June.
- What happens if a booster club has not filed for three years?
- Tax-exempt status is automatically revoked, effective from the filing due date of the third missed year, and the organization is added to a public list. Donations stop being deductible and corporate matching and grants become unavailable. Reinstatement is possible but requires a new application.
- Does the club have to file in a year it raised no money?
- Yes. The obligation is annual and does not depend on the amount raised. A dormant year still needs a filing, and a dormant year is one of the three that counts towards automatic revocation.
