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Nonprofit formation

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Start a nonprofit on solid ground

A nonprofit usually begins as a nonprofit corporation formed under state law. Tax-exempt status is a separate step: the IRS decides whether your organization qualifies under section 501(c)(3), based on an application you file after you incorporate. Firmlane prepares and files your nonprofit incorporation with the state, and help with your Form 1023 or 1023-EZ application is available once you are incorporated.

  • Nonprofit incorporation filed with your state through Firmlane
  • State incorporation does not grant 501(c)(3) status
  • Help preparing Form 1023 or Form 1023-EZ
  • IRS user fees: $600 for Form 1023, $275 for Form 1023-EZ
Start your nonprofit See state fees

Incorporated is not the same as tax-exempt

When the state approves your articles, you have a nonprofit corporation: a legal entity that cannot distribute profits to owners. You do not yet have federal tax exemption, and donors cannot rely on you being a 501(c)(3) charity.

Recognition of 501(c)(3) status comes only from the IRS, after you apply on Form 1023 or Form 1023-EZ and the IRS approves it. The SBA puts it simply: nonprofits must file with the IRS to get tax exemption.

Two approvals

State nonprofit corporation vs IRS 501(c)(3) recognition

  • Who decides

    State nonprofit corporation
    The state agency that registers corporations, usually the Secretary of State.
    IRS 501(c)(3) recognition
    The Internal Revenue Service.

  • How you apply

    State nonprofit corporation
    File articles of incorporation (or a certificate, depending on the state).
    IRS 501(c)(3) recognition
    File Form 1023 or Form 1023-EZ electronically on Pay.gov.

  • Government fee

    State nonprofit corporation
    The state filing fee, which varies by state.
    IRS 501(c)(3) recognition
    IRS user fee: $600 (Form 1023) or $275 (Form 1023-EZ).

  • What it gives you

    State nonprofit corporation
    A legal entity with limited liability that can sign contracts and hold assets.
    IRS 501(c)(3) recognition
    Exemption from federal income tax and eligibility to receive tax-deductible charitable contributions.

  • Ongoing duties

    State nonprofit corporation
    State annual or biennial reports, a registered agent and good standing.
    IRS 501(c)(3) recognition
    An annual Form 990-series return, plus operating within 501(c)(3) limits.

Some states also offer a separate state tax exemption application. Charitable solicitation registration is another separate state process, covered below.

Getting the articles right

What the IRS looks for in your organizing document

For a nonprofit corporation, the organizing document is the articles of incorporation, as accepted by the state. Bylaws alone are not an organizing document. Drafting these clauses is legal work; many founders use an attorney.

Your articles should

  • Limit the organization's purposes to those described in section 501(c)(3), such as charitable, educational, religious or scientific purposes
  • Permanently dedicate assets to 501(c)(3) purposes, including a dissolution clause directing remaining assets to another exempt purpose if the organization ends
  • Show evidence that the state accepted them for filing on a specific date

A 501(c)(3) must not

  • Let any of its net earnings benefit a private shareholder or individual
  • Attempt to influence legislation as a substantial part of its activities
  • Participate in any political campaign for or against a candidate
  • Operate for purposes other than its exempt purposes

The IRS application

Form 1023 or Form 1023-EZ?

Both are filed online through Pay.gov, and the IRS user fee is paid there when you submit. The shorter form has strict eligibility rules.

  • IRS user fee

    Form 1023
    $600
    Form 1023-EZ
    $275

  • Who can use it

    Form 1023
    Any organization applying for 501(c)(3) recognition.
    Form 1023-EZ
    Only organizations that pass the Eligibility Worksheet in the Form 1023-EZ instructions.

  • Size limits

    Form 1023
    None.
    Form 1023-EZ
    Ineligible if annual gross receipts are projected to exceed $50,000 in any of the next 3 years, exceeded $50,000 in any of the past 3 years, or total assets exceed $250,000.

  • Excluded organization types (examples)

    Form 1023
    Not applicable.
    Form 1023-EZ
    LLCs, organizations formed under foreign law or with a foreign mailing address, churches, schools, hospitals and supporting organizations, among others.

  • Detail required

    Form 1023
    Full narrative of activities, finances and governance.
    Form 1023-EZ
    A shorter set of attestations, but you must still meet every 501(c)(3) requirement.

User fees as listed by the IRS on its Form 1023 and 1023-EZ user fee page, reviewed October 17, 2026. Fees can change.

Timing

The 27-month window

  • File within 27 months

    If you apply within 27 months after the end of the month you were legally formed and the IRS approves, exemption is effective from your formation date.

  • File later

    The effective date is generally the date you filed the application.

  • Why it matters

    Donations received before the effective date may not be deductible for donors, so early filing keeps things simpler.

The usual sequence

From idea to recognized charity

  1. 01

    Define the mission and the board

    Write down your exempt purpose and recruit initial directors. State law may set a minimum number of directors for a nonprofit corporation.

  2. 02

    Incorporate with the state

    File articles of incorporation that include the purpose and dissolution language a 501(c)(3) needs. You also need a registered agent in the state.

    Firmlane can help here

  3. 03

    Organize the corporation

    Hold the first board meeting, adopt bylaws and record decisions. State law may require bylaws even though the IRS does not treat them as the organizing document.

  4. 04

    Get an EIN

    The organization needs its own EIN from the IRS, which issues it at no cost. Firmlane offers EIN assistance on eligible orders.

    Firmlane can help here

  5. 05

    Apply for 501(c)(3) recognition

    File Form 1023 or 1023-EZ on Pay.gov, ideally within 27 months of formation. Firmlane can help you prepare the application; organizations with complex activities often also work with an attorney.

    Firmlane can help here

  6. 06

    Register to fundraise where required

    Many states require charities to register before soliciting donations from their residents. The IRS points to the National Association of State Charity Officials (NASCO) to find each state's regulator.

  7. 07

    Keep exemption alive

    File the right Form 990-series return every year and keep state reports current. Missing three years of IRS returns triggers automatic revocation.

How we work

From incorporation to your IRS application

Start a nonprofit in the formation wizard and Firmlane prepares and files your nonprofit articles of incorporation with the state, checks your answers before anything is filed, and tracks the filing in your account. Registered agent service and EIN assistance are available on eligible orders. Any Firmlane fee and the state filing fee are shown before you pay.

Once you are incorporated and have your EIN, Firmlane can also help you prepare your Form 1023 or Form 1023-EZ application. The IRS user fee is paid to the IRS on Pay.gov, and only the IRS decides whether your organization is recognized under section 501(c)(3).

Firmlane does not provide legal advice. Purpose and dissolution language, governance for complex organizations and questions about your specific activities are best reviewed with a nonprofit attorney.

  • State incorporation filing and status tracking in your account
  • Registered agent and EIN assistance on eligible orders
  • Help preparing Form 1023 or Form 1023-EZ
  • Honest limits: no 501(c)(3) guarantee and no legal advice

After recognition

Annual duties of a 501(c)(3)

  • Annual IRS return

    Most exempt organizations file a Form 990-series return each year.

    Organizations other than private foundations that normally have annual gross receipts of $50,000 or less may file Form 990-N (the e-Postcard). Private foundations file Form 990-PF.

  • Automatic revocation

    An organization that does not file a required return or notice for three consecutive years automatically loses its tax-exempt status.

  • State reports

    Annual or biennial reports to keep the corporation in good standing, which vary by state.

  • Charitable registration renewals

    States that require charitable solicitation registration often require periodic financial reports.

Related

General information, not legal or tax advice

This page is general information about forming a nonprofit corporation and applying for 501(c)(3) recognition. It is not legal or tax advice. Firmlane is not a law firm, does not provide legal or tax advice, cannot guarantee IRS recognition of 501(c)(3) status or state approval and is not affiliated with any government agency. IRS user fees and rules are as published on IRS.gov on the review date below and may change.

Official sources

Last reviewed

Start your nonprofit on solid ground

Incorporate with your state through Firmlane, then get help with your Form 1023 or 1023-EZ application. Every fee is shown before you pay.

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$0 Firmlane service fee on eligible formations. You pay the state filing fee, shown before you pay.