What Is Form 1023-EZ: Eligibility, Filing, and Annual Duties

Form 1023-EZ is the IRS’s streamlined application that smaller nonprofits use to obtain tax-exempt status under Section 501(c)(3). You file it electronically through Pay.gov for a $275 user fee, compared with $600 and far more paperwork for the full Form 1023. To qualify, your organization’s annual gross receipts must stay under $50,000 and total assets must be $250,000 or less. File within 27 months of formation and, if approved, your exemption applies retroactively to the date you were legally created.¹

What the Form Does

Filing Form 1023-EZ asks the IRS to officially recognize your organization as exempt from federal income tax. Instead of writing the narrative descriptions and financial projections the full Form 1023 demands, you attest to meeting the legal requirements through a series of yes-or-no questions. If approved, the IRS mails you a determination letter. That letter is what donors, grant-making foundations, and government agencies rely on to verify your organization is a legitimate charity eligible to receive tax-deductible contributions.¹

Timing matters. If the IRS receives and approves your application within 27 months after the end of the month your organization was legally formed, exempt status applies retroactively to the formation date. Miss that window and the exemption only starts on the date the IRS received the application. Organizations that miss the 27-month deadline but want retroactive treatment have to file the full Form 1023.²

Who Can Use Form 1023-EZ

Eligibility turns on size and organizational type. You must meet both financial thresholds:

Annual gross receipts have not exceeded $50,000 in any of the past three years, and you project they will not exceed $50,000 in any of the next three years.
The fair market value of your total assets is $250,000 or less at the time you apply.

The IRS provides an Eligibility Worksheet inside the instructions. A “yes” answer to any question on that worksheet means you cannot use the streamlined form and must file the full Form 1023.³

Organizations That Are Not Eligible

Some organizations are excluded no matter how small they are. Churches, synagogues, mosques, schools, and hospitals must file the full Form 1023. So must supporting organizations and those maintaining donor-advised funds. Limited liability companies are also barred from Form 1023-EZ, even though LLCs can qualify for 501(c)(3) status through the full application. Credit counseling organizations, health maintenance organizations, and organizations with a mailing address in a foreign country are likewise excluded from the streamlined form.²

What You Need Before You File

Gather these before you log in. Missing anything will stall the application.

You need an Employer Identification Number. The IRS will not accept Form 1023-EZ without one, and you can get an EIN for free directly from the IRS online in minutes.⁴

Your governing document, usually articles of incorporation, must contain two specific provisions. The first is a purpose clause limiting the organization’s activities to purposes described in Section 501(c)(3). The second is a dissolution clause requiring that if the organization ever shuts down, remaining assets go to another 501(c)(3), the federal government, or a state or local government for a public purpose. If your articles lack either clause, amend them with your state before applying.²

You will also need the exact legal name of the organization as it appears on your formation documents, a current U.S. mailing address, and the names and addresses of all officers, directors, or trustees.

The form itself asks you to choose a foundation classification. Most small nonprofits seek public charity status under one of three Section 509(a) options; if your organization does not satisfy any of the public support tests, it defaults to private foundation status, which carries stricter rules and excise taxes. Sorting this out before you file is easier than fixing it later.⁵

How to File on Pay.gov

Form 1023-EZ can only be filed electronically through Pay.gov. Create a user account, then search for “1023-EZ” to pull up the form. The application walks you through attestation questions about your structure, activities, and compliance with 501(c)(3) requirements, including confirming that your organization does not engage in political campaign activity or excessive lobbying.¹

You sign digitally under penalty of perjury and pay the $275 user fee by credit card, debit card, or bank transfer. After you submit, the system generates a confirmation number. Save it.⁶

How Long Approval Takes

The IRS issues 80% of Form 1023-EZ determinations within about 22 days. If the agency needs more information or flags something for further review, 80% of those cases resolve within 120 days. You can check status on the IRS website.⁷

If approved, a determination letter arrives by mail and your organization is added to the IRS Tax Exempt Organization Search database.

If the Application Is Rejected

The most common reasons for rejection are an invalid EIN, a declined credit card payment, filing when the organization type is ineligible, incomplete required fields, and failing to respond to IRS requests for additional information.⁸

A rejected Form 1023-EZ carries no formal appeal right. Your options are to fix the issue and resubmit, or to file the full Form 1023 instead. An adverse determination on the merits, which is different from an administrative rejection, can be appealed.⁹

What You Owe Every Year After Approval

The determination letter is not the finish line. Every 501(c)(3) has to file an annual return with the IRS. Small organizations with gross receipts normally at $50,000 or less file Form 990-N, a short electronic notice known as the e-Postcard. It is due by the 15th day of the fifth month after your tax year ends, which is May 15 for calendar-year organizations.¹⁰

Miss three consecutive years of required annual filings and the IRS automatically revokes your tax-exempt status. No warning. Revocation means the organization owes federal income tax on its revenue, donors can no longer deduct their contributions, and the organization drops off the IRS’s public list of recognized charities. Reinstatement requires a new exemption application and, in most cases, paying the user fee again.¹¹

Federal Exemption Is Not the Whole Picture

A 501(c)(3) determination does not clear you to operate in every state. Roughly 40 states require charitable organizations to register with a state agency before soliciting donations from residents, with their own fees and renewal deadlines separate from IRS obligations. Failing to register can result in fines or an order to stop fundraising in that state.¹²

Many states also run separate applications for state income tax exemption, sales tax exemption, or property tax exemption. None of these happen automatically because the IRS granted 501(c)(3) status. Check with your state’s secretary of state or attorney general’s office to see what filings apply.

1
Internal Revenue Service. About Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code
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Internal Revenue Service. Instructions for Form 1023-EZ (Rev. January 2025)
3
Internal Revenue Service. Do You Have the Required Financial Information?
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Internal Revenue Service. Form 1023 – EIN Required to Apply for Exemption
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Internal Revenue Service. Determine Your Foundation Classification
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Internal Revenue Service. Form 1023 and 1023-EZ – Amount of User Fee
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Internal Revenue Service. Where’s My Application for Tax-Exempt Status?
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Internal Revenue Service. Form 1023-EZ Update Report
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Internal Revenue Service. Exempt Organizations Rulings and Determinations Letters
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Internal Revenue Service. Annual Electronic Filing Requirement for Small Exempt Organizations – Form 990-N (e-Postcard)
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Internal Revenue Service. Automatic Revocation of Exemption
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Internal Revenue Service. Charitable Solicitation – Initial State Registration