Applying for Charity Status (US)

About This Guide

This guide covers applying for tax-exempt status under the Internal Revenue Code (IRC) Section 501(c)(3).

Form 1023-Series Applications

The Application for Recognition of Exemption Under Section 501(c)(3) is completed using Form 1023 online through Pay.gov.

Processing Times:

• Form 1023-EZ: 2-4 weeks on average
• Form 1023: The IRS processes 80% of applications within 191 days (approximately 6 months), though complex applications may take longer

Filing Fees: (As of 2025)

• Form 1023-EZ: $275
• Form 1023: $600

Both forms are submitted online through Pay.gov. The IRS processes applications in the order received.

Choosing Your Application Form

There are two ways to apply for 501(c)(3) tax-exempt status:

Form 1023-EZ (Streamlined Application)

• A 3-page online form for smaller organizations
• Processing time: 2-4 weeks on average
• Filing fee: $275
• Eligibility requirements:
  • Gross receipts under $50,000 annually
  • Total assets under $250,000
  • Must be a corporation, unincorporated association, or trust (not an LLC)
  • Cannot be a church, school, hospital, or certain other organization types

Form 1023 (Standard Application)

• A 40-page online form for all organizations
• Processing time: 6 months or longer (the IRS processes 80% within 191 days)
• Filing fee: $600
• Required if you don't meet Form 1023-EZ eligibility criteria

You must complete the Form 1023-EZ Eligibility Worksheet to determine which form you can use. If you answer "yes" to any question on the worksheet, you must file Form 1023.

Considerations When Choosing Form 1023-EZ

While Form 1023-EZ offers faster processing and lower fees, some eligible organizations choose to file Form 1023 instead. Consider the following:

Advantages of Form 1023-EZ:

• Faster approval (2-4 weeks vs. 6+ months)
• Lower filing fee ($275 vs. $600)
• Simpler application process

When to choose Form 1023 instead:

• Donor confidence: Some major donors and institutional funders prefer organizations that have undergone the more thorough Form 1023 review process. The detailed application demonstrates transparency about your activities and finances.
• Future flexibility: If you anticipate growing beyond the $50,000 gross receipts threshold soon, filing Form 1023 provides more comprehensive documentation of your exempt status.
• Retroactive effective date: Organizations that have existed for more than 27 months and want tax-exempt status retroactive to their incorporation date must file Form 1023. Form 1023-EZ cannot request an earlier effective date than the submission date.
• Grant requirements: Some grantmakers specifically require that organizations have filed the full Form 1023.

Both forms result in the same tax-exempt status. The choice depends on your organization's timeline, funding needs, and stakeholder expectations.

Items you will need for Form 1023 and Form 1023-EZ

• Employer Identification Number (EIN)
  • Note that a nonprofit must be established in a US state or territory before applying for an EIN.
• Organizing documents
  • Current Bylaws
  • Articles of Incorporation
• Description of Charitable Purpose
  • This should be found and established in your Bylaws or Articles of Incorporation or Association
• Financial data, which includes statements of revenues and expenses
  • New organizations must give financial statements for the current year and proposed budgets for the next two years, including a detailed breakdown of revenue and expenses.
  • Previously existing organizations must give financial statements for the current year and four prior tax years.
• You will be asked to provide a 509(a) designation

The Application for Recognition of Exemption Under Section 501(c)(3) is completed online through Pay.gov.

Both forms are submitted online through Pay.gov. The IRS processes applications in the order received.

Tax-Exempt Effective Date (the '27-Month Rule')

Your tax-exempt status goes into effect either:

• Retroactive to date of incorporation if you filed within 27 months of the date of incorporation
• Retroactive to the date the Form 1023 application was filed if you filed after 27 months from the date of incorporation

Why this matters: Filing within 27 months ensures your donors can claim tax deductions for contributions made from your incorporation date forward. If you file after 27 months, donations made before your application filing date will not be tax-deductible for your donors.

Important: Organizations filing Form 1023-EZ cannot request an earlier effective date than their submission date if they've existed for more than 27 months. To request retroactive status beyond the filing date, you must file the complete Form 1023.

For Other Tax-Exempt Organizations

If your organization does not qualify for 501(c)(3) status, you may apply under different sections:

501(c)(4) - Social Advocacy Groups, Social Welfare Organizations

• These are organizations that lobby or promote a social or political effort. These organizations may engage in fundraising, lobbying, and efforts to educate the general public about their cause.
• "Seeking legislation germane to the organization's programs is a permissible means of attaining social welfare purposes. Thus, a section 501(c)(4) social welfare organization may further its exempt purposes through lobbying as its primary activity without jeopardizing its exempt status." - IRS
• Donations to these organizations are not tax-deductible.
• Organizations that do not qualify for any of the Charitable Activities can file for 501(c)(4) status. These organizations are tax-exempt but donations are not tax-deductible.
• Form 8976 - Notice of Intent to Operate Under Section 501(c)(4) (must be filed within 60 days of formation){target=_blank}
• Form 1024-A - Application for recognition of exemption from federal income tax under section 501(c)(4)

501(a) - Other Nonprofit or Tax-Exempt Organizations

• The organization is tax-exempt but not a charitable organization; for example, a publicly supported hospital or school.
• Form 1024 - Recognition of Exemption Under Section 501(a) or Section 521 - For recognition of exemption under section 501(a), for being described in section 501(c) (other than section 501(c)(3) or (4)) or section 501(d).

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