Starting a nonprofit organization is one of the most meaningful things you can do — turning a mission you care about into a legally recognized entity that can raise funds, employ staff, and make a lasting impact. But the formation process in New York and New Jersey involves more legal steps than most founders expect.
Between state incorporation, IRS tax-exempt applications, charities registration, bylaws, conflict of interest policies, and ongoing compliance requirements, the path from idea to operational nonprofit typically takes 3 to 9 months and requires careful attention to detail at every stage. And if you're still deciding whether a nonprofit is the right structure, our guide on LLC vs. Corporation in New York covers the for-profit alternatives.
This guide covers the complete process for forming a 501(c)(3) nonprofit in New York and New Jersey — step by step — so you know exactly what to expect.
Nonprofit vs. 501(c)(3): Understanding the Difference
Before diving into the process, it's important to understand that "nonprofit" and "501(c)(3)" are not the same thing. A nonprofit corporation is a legal entity formed under state law. The 501(c)(3) designation is a federal tax exemption granted by the IRS that allows your organization to receive tax-deductible donations and exempts it from federal income tax.
You need both. First, you incorporate as a nonprofit corporation at the state level. Then, you apply to the IRS for recognition of tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Being incorporated as a nonprofit does not automatically make you tax-exempt — the IRS application is a separate and critical step.
Step-by-Step: Forming a Nonprofit in New York
1Choose Your Corporate Name
Your nonprofit's name must be distinguishable from any other corporation on file with the New York Department of State. You can search the Department of State's corporation database to check availability. The name must include a corporate identifier such as "Inc.," "Corp.," or "Incorporated." Avoid names that imply government affiliation or use restricted words (like "bank" or "insurance") without appropriate approval.
2Appoint Your Board of Directors
New York requires a minimum of three directors for a nonprofit corporation. The board is responsible for governance, financial oversight, and ensuring the organization fulfills its charitable mission. Directors must be at least 18 years old. While there are no residency requirements, it is advisable to have at least some directors who are familiar with New York nonprofit regulations.
3Draft and File the Certificate of Incorporation
The Certificate of Incorporation is filed with the New York Department of State. This is the most legally significant document in the formation process because it must contain specific language required by both New York law and the IRS.
The certificate must state the nonprofit's purpose in language that qualifies for 501(c)(3) status (charitable, educational, religious, scientific, or literary purposes), include a dissolution clause directing assets to another 501(c)(3) organization upon dissolution, and include a prohibition on private inurement (no earnings may benefit private individuals).
The filing fee is $75 for standard processing (as of early 2026). Expedited processing is available for an additional fee.
4Draft Bylaws and Corporate Policies
Bylaws are your nonprofit's internal operating rules. While they are not filed with the state, they are required by law and will be reviewed by the IRS as part of your 501(c)(3) application. Your bylaws should address the board's structure, meeting requirements, and voting procedures, officer roles and responsibilities, membership provisions (if applicable), fiscal year, amendment procedures, and indemnification of directors and officers.
New York also requires nonprofits to adopt a written conflict of interest policy. This is more than a formality — New York's conflict of interest rules are broader than federal IRS requirements and apply to transactions involving any related party, including family members and businesses associated with directors or officers.
5Obtain an EIN
Apply for an Employer Identification Number (EIN) from the IRS. This is your nonprofit's federal tax ID number, required for opening a bank account, hiring employees, and filing tax returns. You can obtain an EIN immediately online at irs.gov at no cost.
6Apply for 501(c)(3) Tax-Exempt Status
This is the most complex step. You apply to the IRS using either Form 1023 (the full application) or Form 1023-EZ (the streamlined version for smaller organizations).
Form 1023-EZ is available to organizations that project annual gross receipts of $50,000 or less for the next three years and have total assets of $250,000 or less. The filing fee is $275 as of early 2026, and processing typically takes 2 to 4 weeks.
Form 1023 is required for larger organizations or those with more complex structures. The filing fee is $600 as of early 2026, and processing can take 3 to 6 months or longer. The application requires a detailed narrative description of your activities, financial projections, governance documents, conflict of interest policy, and compensation information for officers and key employees.
7Register with the New York Attorney General
New York requires most charitable organizations to register with the Attorney General's Charities Bureau before soliciting donations. You must file Form CHAR410 (Registration Statement for Charitable Organizations). The filing fee ranges from $0 to $25 depending on your fundraising activity level (as of early 2026). This registration is separate from your state incorporation and IRS application — all three are required.
8Apply for State Tax Exemptions
After receiving your IRS determination letter, apply for New York State tax exemptions. This includes corporate franchise tax exemption (filed with the Department of Taxation and Finance), sales tax exemption using Form ST-119.2, and New York City tax exemptions if operating in the five boroughs. These exemptions are not automatic — each requires a separate application.
Forming a Nonprofit in New Jersey
The process in New Jersey follows a similar structure but with state-specific requirements. New Jersey nonprofits are formed by filing a Certificate of Incorporation with the New Jersey Division of Revenue and Enterprise Services. The filing fee is $75 (as of early 2026).
Like New York, the certificate must include IRS-required language regarding purpose, dissolution, and private inurement. New Jersey also requires a registered agent with a physical address in the state.
After incorporation, the same federal steps apply: obtain an EIN, file Form 1023 or 1023-EZ with the IRS, and apply for state tax exemptions through the New Jersey Division of Taxation.
New Jersey requires charitable organizations to register with the Charities Registration Section of the Division of Consumer Affairs by filing Form CRI-100. The initial registration fee is $30 (as of early 2026), and annual renewal is required by filing Form CRI-300.
Cost Overview (as of Early 2026)
| Item | New York | New Jersey |
|---|---|---|
| Certificate of Incorporation | $75 | $75 |
| IRS Form 1023-EZ | $275 | $275 |
| IRS Form 1023 (full) | $600 | $600 |
| Charities Registration | $0–$25 | $30 |
| State Tax Exemption Applications | $0 | $0 |
| Attorney Fees (typical range) | $2,500–$6,000 | $2,500–$5,000 |
| Total Estimated Range | $3,000–$7,000 | $3,000–$6,000 |
Ongoing Compliance Requirements
Forming the nonprofit is just the beginning. Maintaining tax-exempt status requires consistent compliance with federal, state, and local filing obligations.
Federal (IRS)
All 501(c)(3) organizations must file an annual information return: Form 990-N (e-Postcard) for organizations with gross receipts of $50,000 or less, Form 990-EZ for organizations with gross receipts under $200,000 and total assets under $500,000, or Form 990 for larger organizations. Failure to file for three consecutive years results in automatic revocation of tax-exempt status.
New York
File Form CHAR500 annually with the Attorney General's Charities Bureau, along with a copy of your IRS Form 990 and audited financial statements if your gross revenue exceeds $250,000. File Form CT-13 (exempt organization unrelated business income tax return) with the Department of Taxation and Finance. File a biennial statement with the Department of State every two years.
New Jersey
File Form CRI-300 annually with the Division of Consumer Affairs to renew your charitable registration. File the annual report with the Division of Revenue. File state tax returns as required by the Division of Taxation.
Common Mistakes to Avoid
Using generic certificate language. The Certificate of Incorporation must contain specific IRS-required provisions. Generic or boilerplate language that doesn't match IRS requirements will result in rejection of your 501(c)(3) application.
Forgetting charities registration. Many founders file with the IRS and assume they're done. In both New York and New Jersey, you must separately register with the state before soliciting any donations. Soliciting without registration can result in fines and enforcement action.
Neglecting New York's consent requirements. If your nonprofit will operate a school, childcare center, healthcare facility, or museum in New York, you must obtain consent from the appropriate state agency before the Department of State will accept your Certificate of Incorporation.
Ignoring conflict of interest rules. New York's conflict of interest requirements are broader than federal standards. Transactions involving board members, their family members, or their affiliated businesses must be disclosed and properly approved. Failing to implement a robust conflict of interest policy can create legal and tax problems.
Missing annual filings. The IRS will automatically revoke your 501(c)(3) status if you fail to file annual returns for three consecutive years. Reinstatement is time-consuming and expensive. Set calendar reminders for every filing deadline.
How a Nonprofit Attorney Helps
An attorney experienced in nonprofit formation handles the legal complexity so you can focus on building your mission. At Agarunov Law Firm, we guide founders through every stage of the process — from selecting the right corporate structure and drafting the Certificate of Incorporation with IRS-compliant language, to preparing and filing the 501(c)(3) application, registering with the Attorney General's Charities Bureau, drafting bylaws and conflict of interest policies, and advising on ongoing compliance. Learn more about our business law services or read our guide to starting a business in NYC.
We are admitted in both New York and New Jersey and can handle dual-state formation and registration for organizations operating across state lines.
Frequently Asked Questions
How much does it cost to start a nonprofit in New York?
As of early 2026, state filing fees are $75 for incorporation. The IRS application fee is $600 for Form 1023 or $275 for Form 1023-EZ. Charities registration is $0 to $25. Attorney fees typically range from $2,500 to $6,000. Total startup costs generally run between $3,000 and $7,000. Fees are subject to change — contact us for current figures.
How long does it take to get 501(c)(3) status?
Form 1023-EZ applications typically process in 2 to 4 weeks. Full Form 1023 applications take 3 to 6 months, sometimes longer with IRS inquiries. The entire process from incorporation through IRS determination typically takes 3 to 9 months.
Do I need a lawyer to start a nonprofit?
While not legally required, the IRS estimates the 501(c)(3) application takes over 100 hours to prepare. New York has particularly strict requirements including attorney general oversight, specific incorporation language, and broad conflict of interest rules. An experienced attorney significantly increases approval likelihood and ensures full compliance.
What is the difference between a nonprofit corporation and 501(c)(3) status?
A nonprofit corporation is a state-level legal entity. The 501(c)(3) designation is a federal tax exemption from the IRS. You need both — incorporate at the state level first, then apply to the IRS. State incorporation alone does not make you tax-exempt.
Can my nonprofit operate in both New York and New Jersey?
Yes, but you must register as a foreign nonprofit in the second state and comply with its charitable solicitation registration requirements. Each state has separate filing obligations, fees, and deadlines.
What annual filings does a New York nonprofit need?
Form CHAR500 with the Attorney General, IRS Form 990 (or 990-EZ or 990-N), state tax returns (Form CT-13), and a biennial statement with the Department of State. Missing these filings can result in loss of tax-exempt status and the ability to fundraise.
Ready to Start Your Nonprofit?
Agarunov Law Firm handles nonprofit formation in New York and New Jersey — from incorporation through IRS approval and charities registration.
Schedule a Free Consultation: (212) 920-5989Disclaimer: This article is for informational purposes only and does not constitute legal advice. Filing requirements and fees may change. Consult with a qualified attorney for guidance specific to your situation.