How to Apply for 501(c)(3) Tax-Exempt Status

Form Your Nonprofit at the State Level First

The IRS will only consider a 501(c)(3) application from an organization that is "organized as a trust, a corporation, or an association," per the IRS application-process page. In practice, that means filing nonprofit articles of incorporation with your state's filing office, adopting bylaws, and appointing a board before you touch any IRS paperwork.

State filing fees for nonprofit articles of incorporation vary by state. California's fee is $30, Texas's Form 202 fee is $25, and Florida requires $35 for the articles plus $35 to designate a registered agent, for a $70 minimum, according to each state's official filing schedule. Check your own state's filing office for its current form and fee before you start.

Get an EIN Before You Apply

Every 501(c)(3) applicant needs an Employer Identification Number; the IRS's own application decision tree asks whether you have one before walking you toward either form. You can apply for an EIN directly with the IRS at no cost. Never pay a third party for a basic EIN.

Choose Form 1023 or Form 1023-EZ

Once your organization exists at the state level and has an EIN, you apply for federal tax exemption using one of two IRS forms, both filed electronically through Pay.gov:

• Form 1023-EZ is a shorter, checkbox-style form with a $275 user fee.
• Form 1023 is the full narrative application, with a $600 user fee, per the IRS.

Which one you can use depends on your organization's size and type, not your preference.

Who Can Use Form 1023-EZ

To use Form 1023-EZ, you must complete the Form 1023-EZ Eligibility Worksheet in the form instructions. Two of its core questions ask whether you project annual gross receipts over $50,000 in any of the next three years, and whether your total assets exceed $250,000. Answer "yes" to either, or to several other worksheet questions, and you must file the full Form 1023 instead, per the IRS Form 1023-EZ instructions.

Separately, some organizations cannot use Form 1023-EZ at all, regardless of size. The IRS instructions list churches, schools, hospitals (and organizations described in section 170(b)(1)(A)(i) through (iii)), private operating foundations, and LLCs as automatically ineligible. An LLC seeking 501(c)(3) recognition, for example, must file the full Form 1023 even if it is tiny.

What the Application Costs

Budget for at least three separate costs: the state's nonprofit incorporation fee, the IRS user fee ($275 or $600), and, if you want professional help, a tax professional's or attorney's fee for preparing the narrative sections of Form 1023. The IRS does not offer a fee waiver for either form; the user fee must be paid before the agency will process your application, per the IRS.

How Long the IRS Takes to Decide

Processing times depend on which form you file and whether your case needs extra review. As of applications submitted through February 24, 2026, the IRS reported issuing 80% of Form 1023-EZ determinations within 22 days, and 80% of Form 1023-EZ cases that needed further review within 120 days. For applications submitted through January 12, 2026, the IRS issued 80% of full Form 1023 determinations within 191 days, per the IRS's application-status page. Check that page directly for the current cutoff dates and figures, since the IRS updates them as its caseload changes.

The 27-Month Rule for Retroactive Exemption

If you file Form 1023-EZ (or Form 1023) within 27 months after the end of the month in which your organization was legally formed, and the IRS approves it, your exempt status is effective back to your formation date. File after that window closes, and your exemption generally starts on the date the IRS received your application instead, per the IRS Form 1023-EZ instructions. That gap can matter for donors who want their early contributions to be tax-deductible, so do not let the clock run out.

After the IRS Approves Your Application

Approval brings a determination letter confirming your exempt status and your eligibility to receive tax-deductible donations. From there, most 501(c)(3) organizations file an annual information return (Form 990, 990-EZ or 990-N, depending on size) and keep up their state-level registered agent and any state charitable-solicitation registration. A tax professional can help you confirm which annual return applies to your organization's size.

State Registration Is a Separate Track from the IRS

Federal tax exemption does not automatically register you to solicit donations in your state, or in any other state where you plan to fundraise. Many states require a separate charitable-solicitation registration, renewed annually, in addition to the nonprofit corporation's own state filings. Check your state's Secretary of State or Attorney General site for its specific requirement before you start fundraising.

You Still Need a Registered Agent

A nonprofit corporation is a state law entity like any other corporation, so it must maintain a registered agent at a physical address in its state of formation, the same requirement that applies to LLCs and for-profit corporations. If you serve as your own agent, you need to be available at that address during business hours for as long as the organization exists.

Form 1023-EZ Is Faster, Not Automatically Safer

The shorter form asks you to attest that you meet the eligibility criteria rather than walking the IRS through your actual activities and finances. Answering the eligibility worksheet incorrectly, even unintentionally, can put your exempt status at risk later. If your organization is close to the $50,000 receipts or $250,000 asset thresholds, or your activities are unusual, the longer Form 1023 gives the IRS a fuller picture up front and can reduce the odds of a follow-up inquiry.

Keep the State and Federal Paperwork Together

Your state articles of incorporation, EIN confirmation letter, bylaws, and IRS determination letter are documents you will be asked to produce repeatedly: by banks opening an account, by grantmakers, and by your own board. Keep them in one place from day one.

Budget for Ongoing Filings, Not Just Formation

The state incorporation fee and the IRS user fee are one-time costs, but most 501(c)(3) organizations then file an annual IRS information return and, in many states, an annual or biennial report with the state filing office. Missing either one repeatedly can lead to the IRS automatically revoking your tax-exempt status or the state administratively dissolving the corporation. Talk to a tax professional about which annual return size-tier applies to your organization and when it is due.