Booster club tax return: what athletic and band boosters file

What a booster club usually files

A booster club that is recognized as tax-exempt files one IRS return each year:

• Gross receipts normally $50,000 or less: Form 990-N, the e-Postcard.
• Gross receipts under $200,000 and total assets under $500,000 at year end: Form 990-EZ (or the full Form 990).
• Above either limit: Form 990. 990.tax does not file the full Form 990.

"Normally" is an average: for a club three years old or more, the average over the current year and the two before it. The 990-N vs 990-EZ guide has the details.

Separate from the school

Many booster clubs are organized separately from the school they support, with their own officers, bank account and EIN. A club set up that way is its own organization. It needs its own IRS exemption, usually under section 501(c)(3), and it files its own annual return. The school district's status does not extend to it.

Some parent groups are not separate at all: the money sits in a school activity account and the district accounts for it. A group like that has no return of its own. If you are not sure which you are, look at whose EIN is on the bank account.

Gross receipts are everything that came in

The IRS defines gross receipts as the total amounts received from all sources during the year, without subtracting any costs or expenses. For a booster club that includes:

• Membership dues and donations
• Concession sales, before paying for the food
• Program ads, banners and sponsorships
• Fundraiser sales such as spirit wear, car washes and raffles
• Trip and camp payments collected from families

Clubs that collect trip or camp money and pay it on to a vendor can reach $50,000 in gross receipts without having much in the bank.

Fundraising credits for individual students

Many clubs want to let each family's fundraising pay for their own child's fees. IRS training material on athletic booster clubs looked at this arrangement. Where each parent must raise money and the money is credited toward their own child's costs, the IRS concluded that the club's earnings inure to the benefit of private individuals, which a 501(c)(3) may not allow. Fundraising for the program as a whole, with costs paid for the whole team, does not raise this issue. If your club uses individual accounts, get advice from a tax professional.

When it is due

The return is due on the 15th day of the 5th month after the club's tax year ends. A club on the school year (July 1 to June 30) files by November 15; a calendar-year club by May 15. If the date falls on a weekend or legal holiday, the next business day counts. Form 8868 extends a 990-EZ by six months; the 990-N has no extension. See when Form 990 is due.

Missed years

The IRS charges no penalty for a late 990-N, but three consecutive years without a filing revoke a club's exemption automatically, effective on the due date of the third return. A late 990-EZ can be charged $25 a day, up to the lesser of $13,000 or 5% of gross receipts, unless there is reasonable cause. See late 990-N penalties and automatic revocation.