Tax-Exempt Status: Forms 1023, 1023-EZ, 1024 and 1024-A

Guide · Last reviewed October 20, 2026 · Legal and tax review: pending

An organization is not tax-exempt just because it is a nonprofit under state law. Federal exemption comes from the Internal Revenue Code, and most organizations ask the IRS to recognize it. This page explains the usual path. Facts come from the IRS page on applying for tax-exempt status and the Form 1023 instructions (Rev. 12-2024).

The usual steps

Form the organization under state law, most often as a nonprofit corporation. For a 501(c)(3), the organizing document must limit the organization to exempt purposes and dedicate its assets to exempt purposes if it dissolves.
Get an Employer Identification Number (EIN) and adopt bylaws, elect the board and keep minutes.
Apply for recognition on the form for your type (table below), electronically.
Register with your state where required: charitable solicitation, state tax exemptions and annual reports (see Illinois).
Start the yearly cycle: bookkeeping, donor receipts, payroll filings, Form 990 series, state reports.

Which form

Organization	Application
501(c)(3): charitable, religious, educational and similar	Form 1023, or the streamlined Form 1023-EZ for smaller organizations that pass the IRS eligibility worksheet in the Form 1023-EZ instructions
501(c)(4): social welfare	Form 1024-A, and the notice of intent to operate under 501(c)(4) on Form 8976
Most other exempt categories under section 501(a)	Form 1024

Electronic filing

Applications are filed on Pay.gov: Form 1023 since January 31, 2020, Form 1024-A since January 5, 2021, and Form 1024 since January 3, 2022. The Form 1023 instructions say paper filing is no longer accepted. The user fee is paid through Pay.gov when you file; the amounts are set by the IRS and change, so read the IRS user fee page before you file.

The 27-month rule

Timing mattersIf a 501(c)(3) files its application within 27 months after the end of the month in which it was legally formed, and the IRS approves it, exempt status generally goes back to the date of formation. File later and the effective date is generally the date you submitted the application (with limited exceptions listed in the instructions).

That date decides whether early donations were tax-deductible and whether the organization owed tax on income in its first months. Do not wait for the board to “get organized” before applying.

After approval

Keep the determination letter. Funders, banks and state regulators ask for it.
File the annual return or e-postcard every year (which Form 990). Three missed years end the exemption.
Report changes in purposes, name, address or governing documents as the IRS requires; they can affect the exemption and the Form 990.
Watch unrelated business income.

Already formed years ago?

Many small groups never applied, or applied and lost the letter. We can help find out whether the IRS recognized the organization, and what to do if it did not, or if exemption was revoked.

General educational information. Filing rules, thresholds, penalties and state requirements depend on individual facts and change over time. Confirm them on irs.gov and with your state regulators, and consult a qualified professional before filing a return or an application. This site is an independent guide and is not affiliated with the IRS.