Smaller Nonprofits Can Now Use An Easier 501(c)(3) Tax Exemption Application: Form 1023-EZ

On July 1, 2014, the IRS introduced a new, shorter application form, Form 1023-EZ, to help small charities apply for 501(c)(3) tax-exempt status more easily. Most organizations with annual gross receipts of $50,000 or less and assets of $250,000 or less that are not setting up an institutional nonprofit (such as a school, hospital, or church) should qualify to use the new form.  See the IRS news release  for details.

The 1023-EZ form, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code,  is three pages long as opposed to the 26 page standard Form 1023 application. The change will allow the IRS to speed the approval process for smaller groups and free up resources to review applications from larger, more complex organizations while reducing the application backlog.  

The new 1023-EZ form must be filed using, accompanied by a $400 user fee. The instructions include an eligibility checklist that organizations must complete before filing the form.

Nolo's nonprofit corporation formation books, which provide instructions to complete the standard Form 1023, can be used to fill in the new Form 1023-EZ (since the 1023-EZ questions are a subset of the questions on the standard 1023 form). One notable feature of the 1023-EZ is that it eliminates the need to include detailed financial information to show how you qualify for public charity status.