To start a 501(c)(3) in Virginia, you form a nonstock corporation with the State Corporation Commission for a $75 filing fee, get an Employer Identification Number from the IRS, then apply for federal tax-exempt status using Form 1023 ($600) or the streamlined Form 1023-EZ ($275). File that federal application within 27 months of incorporation so your exempt status reaches back to day one. Budget roughly $450 to $775 in government fees and a few months of waiting, most of it on the IRS side.
Line Up Directors and Officers
Virginia law lets a nonstock corporation exist with a single director, but a one-person board raises red flags at the IRS because it undermines the oversight that tax-exempt status assumes.1Virginia Code Commission. Code of Virginia 13.1-855 – Number and Election of Directors Most nonprofit advisors suggest at least three unrelated directors. You also need officers whose titles and duties are set by the bylaws or a board resolution, and at minimum somebody must serve as secretary to keep meeting minutes and authenticate records.2Virginia Code Commission. Code of Virginia 13.1-872 – Required Officers One person can hold more than one officer role, so a small founding team can cover every slot. Only one incorporator has to sign and deliver the articles.
File Articles of Incorporation With the SCC
Your nonprofit legally exists the moment the State Corporation Commission accepts Form SCC819. The fee is $75, and you can file online through the SCC’s Clerk’s Information System or by mail.3Virginia SCC. Virginia Nonstock Corporations Standard processing runs about one to seven business days. Next-day service costs $50 to $100, and same-day service costs $200.4Virginia SCC. Online Expedited Services If you have a name in mind but aren’t ready to file, reserve it for 120 days on Form SCC631 for $10. The name must be distinguishable from every other entity on the SCC’s records.
Purpose and Dissolution Language the IRS Requires
The articles have to include two clauses the IRS looks for directly. A purpose clause stating the corporation is organized exclusively for one or more exempt purposes under Section 501(c)(3) of the Internal Revenue Code, and a dissolution clause committing that any remaining assets go to another 501(c)(3) or a government entity if the corporation shuts down.5Internal Revenue Service. Suggested Language for Corporations and Associations Per Publication 557 Without the dissolution language, the IRS will reject the exemption application because nothing stops the assets from ending up in private hands. The IRS publishes sample wording; using it verbatim is the safest route.
Registered Agent
Every Virginia nonstock corporation must have a registered agent with a Virginia street address. The agent can be a Virginia resident who is either an officer or director of the corporation or a member of the Virginia State Bar, or a business entity authorized to operate in Virginia.6Virginia Code Commission. Code of Virginia 13.1-833 – Registered Office and Registered Agent The agent’s business address has to match the registered office address in the articles. Commercial agent services generally run $100 to $300 a year; a willing director or officer can serve for free.
Draft Bylaws and a Conflict of Interest Policy
Bylaws are your operating manual: how often the board meets, how directors are elected and removed, what officers you have, and how decisions get made. Virginia doesn’t require you to file bylaws with the state, but the IRS expects to see them with the exemption application. Sloppy bylaws are a common cause of application delays because they leave ambiguity about who controls the organization and how money is spent.
You also need a written conflict of interest policy before filing for 501(c)(3) status. The policy requires directors and officers to disclose financial interests that could conflict with the mission and to step out of decisions where they’d benefit personally. Form 1023 asks specifically whether you’ve adopted one, and organizations without it invite extra scrutiny.
Get an EIN From the IRS
Once the SCC confirms your corporation exists, apply for an Employer Identification Number. Every tax-exempt organization needs one whether or not it has employees. The online application at IRS.gov is free and issues the number immediately; Form SS-4 by mail or fax also works.7Internal Revenue Service. Get an Employer Identification Number You’ll need the EIN before the federal exemption application, a bank account, or any hiring.
Apply for Federal 501(c)(3) Status
Federal recognition happens through Form 1023 or Form 1023-EZ, both filed electronically on Pay.gov.8Internal Revenue Service. Form 1023 and 1023-EZ – Amount of User Fee
Form 1023-EZ or Full Form 1023
Form 1023-EZ is available only if all three of the following are true: your annual gross receipts haven’t exceeded $50,000 in any of the past three years, your projected annual gross receipts won’t exceed $50,000 in any of the next three years, and your total assets don’t exceed $250,000 in fair market value.9Internal Revenue Service. Instructions for Form 1023-EZ (Rev. January 2025) The user fee is $275. Any organization that crosses those thresholds files the full Form 1023 for $600.
The full form is a lot more work. You’ll write a detailed narrative of your organization’s past, present, and planned activities, and provide financial data whose scope depends on how long you’ve been operating. A brand-new nonprofit provides projected income and expenses for the current year plus the next two years.10Internal Revenue Service. Instructions for Form 1023 (Rev. December 2024) You’ll also disclose compensation for officers, directors, and highly paid employees so the IRS can see that no private individual is skimming from the organization.
The 27-Month Rule
File your exemption application within 27 months from the end of the month your corporation was formed and the IRS can recognize your tax-exempt status retroactively to the date of formation. Miss that window and your exempt status only starts from the date the application is filed.11Internal Revenue Service. Form 1023 – Purpose of Questions About Organization Applying More Than 27 Months After Date of Formation Donations made during the gap wouldn’t be tax-deductible to donors, which can create real problems with early supporters.
How Long It Takes
As of early 2026, the IRS processes 80% of Form 1023-EZ applications within about 22 days. Straightforward full Form 1023 applications take considerably longer, with 80% processed within roughly 191 days. Applications flagged for follow-up can stretch to 120 days even on the EZ track.12Internal Revenue Service. Where’s My Application for Tax-Exempt Status When the IRS approves the application, it issues a Letter of Determination. Keep it somewhere safe; grantmakers, banks, and government agencies will ask for it repeatedly.
Public Charity vs. Private Foundation
Every 501(c)(3) is classified as either a public charity or a private foundation, and the IRS defaults to private foundation unless you prove otherwise. Private foundations must distribute 5% of net assets annually and face excise taxes and stricter operational rules that most community nonprofits would find burdensome. To qualify as a public charity, you generally have to show that at least one-third of your support comes from the general public, including government grants and contributions from individuals.13Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Form 990, Schedules A and B – Public Charity Support Test Organizations that fall short of one-third can still qualify under a 10% facts-and-circumstances test. Your Form 1023 asks which classification you’re claiming, and you’ll have to keep meeting the support test on your annual returns.
Register Before You Solicit Donations
Before your organization asks anyone in Virginia for money, register with the Virginia Department of Agriculture and Consumer Services on Form 102. The initial registration fee is $100.14Virginia Department of Agriculture and Consumer Services. Charitable Solicitation Registration The requirement covers nearly all charitable organizations soliciting contributions in the state, with limited exceptions for churches and some small organizations. Renewal is annual and due by the 15th day of the fifth month after your fiscal year ends, so a calendar-year organization renews by May 15. Miss it without an extension and you’ll have to file a new initial registration instead of a renewal.
Apply for the Virginia Sales Tax Exemption
Federal 501(c)(3) status doesn’t automatically exempt you from Virginia state taxes. To make purchases without paying sales tax, apply to the Virginia Department of Taxation on Form NP-1, either through the Nonprofit Online portal or by mail.15Virginia Department of Taxation. Nonprofit Organizations
Virginia sets several conditions beyond holding a federal exemption letter. Your organization’s annual administrative costs, including salaries and fundraising, cannot exceed 40% of annual gross revenue. If your gross revenue hit at least $750,000 the previous year, you need a financial review by an independent CPA; at $1.5 million or more, the Department of Taxation may require a full audit.16Virginia Code Commission. Code of Virginia 58.1-609.11 – Exemptions for Nonprofit Entities You also have to be current on charitable solicitation registration, which is another reason to handle VDACS first.
Stay Compliant Every Year
Getting the exemption isn’t the finish line. Fall behind on filings and you can lose it.
Federal Annual Returns
Every 501(c)(3) files an annual information return with the IRS. Organizations whose gross receipts are normally $50,000 or less file Form 990-N, an electronic postcard that takes minutes.17Internal Revenue Service. Annual Electronic Filing Requirement for Small Exempt Organizations – Form 990-N (e-Postcard) Organizations with gross receipts under $200,000 and assets under $500,000 can file the shorter Form 990-EZ. Larger organizations file the full Form 990.18Internal Revenue Service. 2025 Instructions for Form 990
Miss three consecutive years of filing and the IRS automatically revokes your tax-exempt status.19Internal Revenue Service. Automatic Revocation of Exemption Reinstatement means a new application and a new user fee, and donors who gave during the revocation period lose their deductions. Small nonprofits with little or no revenue often assume the 990-N postcard is optional. It isn’t.
Virginia State Filings
Virginia nonstock corporations file an annual report with the SCC and pay a $15 registration fee by the anniversary of the corporation’s formation.20State Corporation Commission. Annual Registration Fees Your VDACS charitable solicitation registration also renews annually. Slipping on either one puts your good standing at risk and disrupts fundraising.
What It All Costs
Government fees you should plan for:
- Name reservation (optional): $10 for 120 days
- Articles of incorporation (SCC Form SCC819): $75, plus $50 to $200 for expedited processing
- Federal tax-exemption application: $275 for Form 1023-EZ or $600 for Form 1023
- Charitable solicitation registration (VDACS Form 102): $100 initial fee
- Virginia sales tax exemption (Form NP-1): no application fee
- Ongoing annual costs: $15 for the SCC annual report, plus a variable VDACS renewal fee
Expect $450 to $775 in government filing fees at a minimum. If you hire an attorney to draft the articles, bylaws, and federal application, legal fees generally run $200 to $500 an hour, though some lawyers offer flat-fee nonprofit formation packages. Founders on tight budgets often handle the filings themselves using IRS instructions and the SCC’s online system. The purpose and dissolution language in the articles is the one place where a quick professional review can prevent an expensive rejection.