---
title: "Form 1023 vs 1023-EZ: Choosing the Right Tax Exemption Form"
description: Confused between IRS Form 1023 and 1023-EZ? Learn key differences—including eligibility, cost, and complexity—to choose the right path for your nonprofit.
---

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# [Form 1023 vs 1023-EZ: Choosing the Right Tax Exemption Form](https://accountants.sva.com/biz-tips/filing-application-for-tax-exemption-form-1023-or-1023ez)

 Written by [Lynn Heslinga, CPA](https://accountants.sva.com/biz-tips/author/lynn-heslinga-cpa) | Apr 05, 2022

| **Highlights:** |
| --- |
| - Outlines key differences between IRS Form 1023 and the simplified Form 1023-EZ for nonprofit tax-exempt status, including length, complexity, and eligibility. - Details eligibility criteria for 1023-EZ — financial thresholds, organization type, and structural requirements to qualify for the streamlined application. - Emphasizes importance of properly drafted organizing documents and working with experienced advisors to choose and complete the correct IRS form. |

When your organization is ready to apply for tax-exempt status, there are two applications available – Form 1023 or Form 1023-EZ.

- The original long Form 1023 is composed of 40 pages and requires detailed information about your organization.
- The shorter Form 1023-EZ is only three pages long and requires brief information about your organization. The caveat here is the restrictions on who can use this shorter form.

[(Download Video Transcript)](https://accountants.sva.com/hubfs/How%20to%20Apply%20for%20Tax%20Exempt%20Status%20-%20Form%201023%20vs%201023-EZ.pdf)

## What You Need to Know About Form 1023-EZ

To determine if you are eligible to file the Form 1023-EZ, you must complete the Form 1023-EZ Eligibility Worksheet which is included in the [IRS's Instructions for Form 1023-EZ](https://www.irs.gov/pub/irs-pdf/i1023ez.pdf).

The form includes 30 “yes or no” questions and if your organization answers “yes” to any of the questions, it is required to file the standard Form 1023.

### Before You Begin the Eligibility Worksheet, Here are a Few Things You Should Know:

- There are some organization types that are not eligible to use Form 1023-EZ including churches, schools, colleges, universities, [hospitals](https://accountants.sva.com/industries/physicians), agricultural research organizations, health maintenance organizations, and accountable care organizations.
- The organization’s annual gross receipts cannot exceed $50,000 for the next three years.
- The organization’s total assets cannot exceed $250,000 in fair market value.
- The organization must be founded in the United States.
- The organization must be registered as a corporation, unincorporated, association, or [trust](https://accountants.sva.com/services/trust-and-estate-planning-services). Entities formed as [limited liability companies (LLC)](https://accountants.sva.com/biz-tips/reasons-an-llc-might-be-the-ideal-choice-for-your-business) are not eligible to file Form 1023-EZ.
- The organization cannot have donor-advised funds.
- The average processing time for Form 1023-EZ is about 2-4 weeks. By contrast, processing time for Form 1023 can take between 3 and 6 months and may take up to a year.

Along with the restrictions presented, be sure that your organizing documents are properly drafted to avoid jeopardizing the application. For example, be sure you have an appropriately defined tax-exempt purpose.

It is always best to work with an experienced advisor to complete either Form 1023 or Form 1023-EZ. Your [advisor](https://accountants.sva.com/professionals) will help you determine which filing option is best for your organization.

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