Become a recognized 501(c)(3) charity.
Forming a nonprofit at the state level does not make it tax-exempt. To be recognized as a 501(c)(3), so donations are deductible and you can seek grants, you apply to the IRS on Form 1023. Many smaller organizations qualify for a shorter version, the 1023-EZ. We confirm which one you can use and prepare the application that gets you your determination letter.
How a nonprofit becomes tax-exempt.
Form 1023 is the Application for Recognition of Exemption under Section 501(c)(3). Incorporating as a nonprofit in your state creates the entity, but only the IRS can grant federal tax exemption, and this is the form that asks for it. Recognition is what lets donors deduct their gifts, opens the door to most grants, and exempts the organization from federal income tax. There are two versions: the long-form 1023, which every organization can use, and a shorter 1023-EZ that smaller organizations qualify for. When you file within a set window after forming, the exemption can reach back to your formation date.
The application, and the letter it earns.
The goal is a determination letter, the IRS document that recognizes your exemption. We prepare everything that gets you there.
- The right form for you. The full Form 1023 or the shorter 1023-EZ, based on an eligibility check of your size and activities.
- The narrative and attachments. The description of your purpose and programs the IRS reads, plus the financial detail the long form requires.
- The user fee, paid correctly. The application fee submitted through Pay.gov with the filing, so nothing is held up.
- Your determination letter. The IRS recognition of 501(c)(3) status, the document donors and grantmakers ask to see.
Smaller groups get the short form.
The 1023-EZ is faster and cheaper, but it has firm eligibility limits. Some organizations are required to use the full 1023 no matter their size.
- Projected annual gross receipts of 50,000 dollars or less over the first three years
- Total assets of 250,000 dollars or less
- Formed in the United States as a corporation, unincorporated association, or trust
- Activities that fit inside the EZ eligibility worksheet
- Churches, schools, colleges, and hospitals
- Organizations expecting to exceed the receipts or asset limits
- Private foundations in some cases, and organizations formed outside the United States
- Groups whose activities fall outside the EZ worksheet
New to 501(c)(3) status altogether? Start with the basics in 501(c)(3) explained, then come back to the application.
What it costs, and when to file.
These figures are verified against current IRS guidance. The two that shape your plan are the user fee, which differs by form, and the 27-month window that decides how far back your exemption reaches.
User fees are set by the IRS and can change. We confirm the current amount before you file.
From formed to recognized.
- 1Check which form you can use
We run the eligibility worksheet to see whether you qualify for the shorter 1023-EZ or need the full 1023.
- 2Build the application
We prepare the form, the purpose-and-programs narrative, and, for the long form, the financial detail the IRS expects.
- 3File on Pay.gov with the fee
We submit electronically and pay the correct user fee, filing inside the 27-month window wherever possible.
- 4Respond and receive the letter
We handle any IRS follow-up questions and deliver your determination letter once exemption is granted.
The narrative is where applications stall.
Most 1023 delays come from a purpose description or a budget that raises IRS questions. We prepare the application to answer them the first time, and we pick the form that fits so you neither overpay nor lose eligibility.
We confirm your EZ eligibility so you use the faster form when you can, and the full one when you must.
We write the purpose and program description the way the IRS reads it, to avoid follow-up delays.
We file in time to reach exemption back to your formation date wherever your timeline allows.
You see our price and the IRS user fee up front, kept separate. See pricing →
Before and after your exemption.
Incorporate the nonprofit at the state level before you apply for exemption.
Explore → Every year afterForm 990Once recognized, file the annual return that keeps your exemption.
Explore → Not a charityForm 1024The application for other 501(c) organizations that are not 501(c)(3).
Explore → Learn the basics501(c)(3) explainedWhat tax-exempt status means and what it requires.
Explore →Form 1023, answered.
Do I have to file Form 1023 at all?
To be recognized as a 501(c)(3), yes. Forming a nonprofit in your state does not grant federal exemption. Without recognition, donations are not deductible and most grantmakers will not fund you. A narrow set of organizations, such as churches, are treated as exempt without applying, but they often file anyway for the letter.
What is the difference between the 1023 and the 1023-EZ?
The 1023-EZ is a shorter, lower-fee application for smaller organizations, with projected gross receipts of 50,000 dollars or less and assets of 250,000 dollars or less. The full 1023 is longer, costs more, and is required for larger organizations and certain types such as churches, schools, and hospitals.
How much does it cost?
The IRS user fee is 600 dollars for the full 1023 and 275 dollars for the 1023-EZ, paid on Pay.gov. That is the government fee, separate from any preparation cost.
What is the 27-month rule?
If you file within 27 months of the end of the month you were formed, approved exemption generally reaches back to your formation date. File later and it usually applies only from the application date, leaving a gap where gifts may not have been deductible. After approval, you file Form 990 each year.
What do I need before I apply?
An EIN, your formation documents, a description of your programs, and a budget. We tell you exactly what is missing before we file.