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Turning Your Non-profit Into a 501(c)(3)

If you’ve been considering turning your non–profit organization into a 501(c)(3) entity, you’re not alone. Becoming a 501(c)(3) allows your organization to access a variety of resources, including tax–exempt status, corporate sponsorships, and access to grants and donations. 

The process of transitioning from a non–profit to a 501(c)(3) can seem daunting, but it’s important to remember that the end result is worth the effort.

Here are some steps to help you get started on the path to becoming a 501(c)(3): 

To turn your non-profit into a 501(c)(3) organization, you will need to follow these general steps:

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Incorporating Your Non-profit

First, you need to incorporate your non-profit organization as a legal entity in your state. This means that you will need to file articles of incorporation with the Secretary of State’s office in the state where your non-profit is located.

Obtaining an Employer Identification Number (ein)

You will need to obtain an EIN from the Internal Revenue Service (IRS). This is a unique identification number that your organization will use for tax purposes.

Draft and file your 501(c)(3) application

Draft and file your 501(c)(3) application: You will need to draft and file Form 1023, the application for recognition of exemption under section 501(c)(3) of the Internal Revenue Code. This application will require detailed information about your organization, including your purpose, structure, governance, and financial information.

Pay Your Application Fee

As of 2021, the application fee for Form 1023 is $600 for organizations with annual gross receipts of $50,000 or more, and $275 for organizations with annual gross receipts of less than $50,000.

Wait for Approval

Once you have filed your application, the IRS will review it to ensure that your organization meets the requirements for tax-exempt status. This process can take several months, so be patient.

You may check the status of your application during your wait time, but the IRS specifically requests that you not call to request information about your filing

Organizations must electronically file this form to apply for recognition of exemption from federal income tax under section 501(c)(3).

Note. You may be eligible to file Form 1023-EZ, a streamlined version of the application for recognition of tax exemption. You must complete the Form 1023-EZ Eligibility Worksheet in the Instructions for Form 1023-EZPDF to determine if you are eligible to file this form. If you are not eligible to file Form 1023-EZ, you can still file Form 1023.

Current Revision

To submit Form 1023, you must:

  1. Register for an account on Pay.gov.
  2. Enter “1023” in the search box and select Form 1023.
  3. Complete the form.

Instructions for Form 1023 (Print VersionPDF)

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Maintaining Your 501(c)(3) Status

Once your organization has been granted 501(c)(3) status, you will need to make sure that you comply with all of the rules and regulations that apply to tax-exempt organizations. This includes filing annual information returns with the IRS, keeping accurate financial records, and following other rules related to governance, fundraising, and charitable activities.

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