How to open a bank account for a PTO or booster club

Can a club open a bank account?

Yes. A PTA, a school PTO or a booster club can have its own bank account, and it should. The account is opened in the group's name and uses the group's EIN (Employer Identification Number), the number the IRS gives the group. Group money should never sit in a volunteer's personal account or pass through anyone's personal Venmo or PayPal.

Most PTOs and PTAs are unincorporated associations. For that kind of group, banks typically ask for minutes signed by the secretary and photo ID from each signer. If your group is incorporated, bring the articles of incorporation as well.

How to set up a booster club bank account

The same steps work for a PTO, a PTA unit or a booster club:

1. 1 Find or get the EIN. It's on the IRS letter (CP 575). Lost it? An officer can call the IRS at 800-829-4933 for a replacement, Letter 147C.
2. 2 Vote on the signers. Record in the minutes who was elected and who may sign on the account, as the bylaws allow. The secretary signs the minutes.
3. 3 Call the bank and ask what it needs. Some want every signer there in person. Some have their own form or resolution. One call saves a second trip.
4. 4 Go in with the papers. Bring the EIN, signed minutes, bylaws, a cover letter and photo ID for each signer.
5. 5 Set up online access before you leave. Each signer gets their own login, and you ask for a second online administrator.

The bank will also ask each signer for personal details, like date of birth, address and often a Social Security number. That's normal: it's how the bank confirms who you are. The account itself still belongs to the group and uses its EIN. Ask the bank to confirm that before you leave.

Already have an account and just need new names on it? That's a signer change, not a new account. See how to change the signers on the bank account.

What to ask for in a PTA bank account

There's no single best PTA bank account. What matters is that the account makes good habits easy. Ask the bank for:

• Checks with two signature lines, if you write checks. Two officers sign every check. See two signatures on every check.
• Online access in each officer's own name, not a shared login. Being a signer doesn't make you the online banking administrator, so ask for that role, and for a second administrator so you're never the only one.
• View-only access for an officer who doesn't sign checks, so they can look over each month's statement.
• Alerts for withdrawals over an amount your board picks.
• A copy of the signature card for your records.
• Statements mailed to a group address, like the school, not a volunteer's home.

Skip debit and ATM cards on the account. Some state PTAs, like Utah's, ban them, so check your state's rules.

EIN, tax-exempt status and the bank

An EIN lets the group open an account and file with the IRS. It doesn't make the group tax-exempt. Those are two different things.

• Check your status. Look your group up by EIN in the IRS Tax Exempt Organization Search. If you're not listed, ask a CPA or your state PTA. Very small groups (normally $5,000 a year or less in gross receipts) can be exempt without applying, but larger ones need IRS approval. More on PTA tax-exempt status.
• Keep the letters. The EIN letter and any IRS determination letter go in the permanent file. The next treasurer will need them.
• Use the EIN for payment apps too. If group money runs through a volunteer's personal app, any tax form the app sends goes to that volunteer, not the group. Make sure any Form 1099-K goes to the group's EIN.

PTA, PTO and booster club differences

• PTA units follow their state PTA's rules on signers, cards and payment apps, then their bylaws. Many state PTAs require signers who aren't related to each other.
• PTOs set their own rules in their bylaws. If the bylaws don't say how many signatures a check needs, vote on it and record it in the minutes.
• Booster clubs open the account under the club's own EIN: never the school district's number, and never a parent's Social Security number. The same goes for any PTO or PTA.

Common mistakes

• Opening the account under someone's Social Security number. If yours is, ask the bank how to move it to the group's EIN.
• Going to the bank without calling. Banks differ. Ask what they need first.
• One shared online login. Give each officer their own, and name two administrators.
• Picking a co-signer from your own household. Choose someone who isn't related to you and doesn't live with you.
• Assuming an EIN means tax-exempt. Check the IRS search before filing season.