Starting a nonprofit is overwhelming. We make it simple. Illinois is inexpensive to incorporate in — $50 — but it runs two separate oversight systems: the Secretary of State handles your corporation, and the Attorney General's Charitable Trust Bureau handles your charity registration. Two agencies, two sets of deadlines, two sets of penalties.
Add a sales tax exemption number that expires every five years and a three-director minimum, and you have the four things Illinois founders get wrong. Here is the whole process in order.
What this guide covers
- The Illinois steps at a glance
- Step 1: Name your Illinois nonprofit (and the NFP rule)
- Step 2: Directors, officers and your registered agent
- Step 3: File your Articles of Incorporation
- Step 4: Bylaws, policies and your first board meeting
- Step 5: Get your EIN
- Step 6: Apply for 501(c)(3) status
- Step 7: Register with the Attorney General before you solicit
- Illinois income tax, sales tax and property tax
- Illinois fees at a glance
- How long the whole thing takes
- Your annual compliance calendar
- Six mistakes Illinois founders make
The Illinois steps at a glance
- Check your name against the Secretary of State's records and reserve it if you are not ready to file.
- Line up three directors and a registered agent with an Illinois street address.
- File Articles of Incorporation (Form NFP 102.10) with the Secretary of State, adding the IRS purpose and dissolution language.
- Adopt bylaws and a conflict-of-interest policy and hold your organizational meeting.
- Get your federal EIN.
- Apply for 501(c)(3) status on IRS Form 1023-EZ or the full Form 1023.
- Register with the Attorney General on Form CO-1 before you solicit contributions.
- Apply for your sales tax E number on Form STAX-1, and diary the five-year renewal.
Step 1: Name your Illinois nonprofit (and the NFP rule)
The name must be distinguishable upon the records of the Secretary of State. Illinois adds a rule most states do not have: if the name contains any word or phrase implying a purpose other than one authorised by the Not For Profit Corporation Act, it must end in "NFP". Corporate words like "Corporation", "Company", "Incorporated" or "Limited" are optional rather than required.
Political party names — "Democrat", "Republican" and the like — cannot be used without written consent from that party's state central committee. Words restricted by other Illinois statutes, such as banking or insurance terms, need their own regulatory sign-off.
Name reservation is Form NFP 104.10, $25, and holds the name for 90 days.
Step 2: Directors, officers and your registered agent
Directors: three minimum. Illinois statute is unambiguous — the board "shall consist of three or more directors". This is not aspirational best practice; it is the legal floor, and founders arriving from states that allow a single director file non-compliant paperwork every day. Directors need not be Illinois residents unless your articles or bylaws say so.
Officers. Illinois requires whatever officers your bylaws provide for — there is no statutory minimum number or mandated set of titles. President, secretary and treasurer is convention, not law.
Registered agent. Either an individual resident in Illinois whose business office is the registered office, or an authorized entity. The address must be a real Illinois street address; a P.O. box is not acceptable.
Step 3: File your Articles of Incorporation
The filing is Form NFP 102.10, $50, with expedited service for an additional $25. Standard processing is commonly around ten business days and expedited around 24 hours, though the Secretary of State does not publish a guaranteed turnaround — check current times before planning around a date.
Your Articles must state a specific purpose drawn from the list of purposes authorised in the Act, name your registered agent and registered office, and carry a name that meets the rules above. Duration is perpetual unless you say otherwise.
And then the part Illinois does not tell you: the Secretary of State's template does not meet IRS requirements for 501(c)(3) status. Illinois' boilerplate purpose language is written for state corporate law, not for the federal organizational test. You must add a purpose clause limiting the corporation to exempt purposes under section 501(c)(3), and a dissolution clause dedicating remaining assets to another 501(c)(3) or to a government body for a public purpose. Skip it and the IRS sends the application back.
Step 4: Bylaws, policies and your first board meeting
Bylaws govern meeting frequency, quorum, voting, officer elections and dissolution, and must be consistent with your Articles. They are not filed with Illinois, but Form 1023 requires a copy.
Adopt a conflict-of-interest policy at the same time — the IRS publishes a model in the Form 1023 instructions and asks about it directly. Hold an organizational meeting to adopt both, elect officers, set the fiscal year, and authorize the EIN application and bank account. Our bylaws guide covers the clauses first-time founders miss.
Step 5: Get your EIN
Free and immediate at IRS.gov. You will need it before you can apply for the Illinois sales tax E number or open a bank account. See our EIN guide.
Step 6: Apply for 501(c)(3) status
The federal step is the same in every state. Most small Illinois nonprofits use Form 1023-EZ ($275 user fee); larger or more complex organizations file the full Form 1023 ($600). The IRS issues 80% of 1023-EZ determinations within 22 days and 80% of full Form 1023 determinations within 191 days. Our Form 1023 vs 1023-EZ guide covers which one fits.
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Explore 501(c)(3) Filing →Step 7: Register with the Attorney General before you solicit
Illinois charities register with the Attorney General's Charitable Trust Bureau, and the expectation is that you register before you solicit contributions. A launch event or crowdfunding page that goes live first is already a problem.
| Filing | Fee | When |
|---|---|---|
| Form CO-1 initial registration (CO-2 if under one year old) | $15 | Before soliciting |
| Late initial registration penalty | $200 | — |
| Form AG990-IL annual report | $15 | Within 6 months of fiscal year end |
| AG990-IL late fee | $100 | Per late report |
Your CO-1 goes in with your governing documents, officer and director details, your IRS determination letter or pending Form 1023, and any professional fundraiser contracts.
Who has to file the annual AG990-IL: organizations with assets exceeding $4,000 at any point in the year, or gross contributions exceeding $15,000. Organizations at or below $25,000 in combined gross revenue and assets may use a simplified version. A 60-day extension is available on written request before the due date, and a further extension matching a federal IRS extension is available with proof.
Financial statement thresholds as of 1 January 2024: audited financials are required when gross contributions exceed $500,000, or when a professional fundraiser brings in more than $25,000. Reviewed financials are required between $300,000 and $500,000 where fundraising is done by staff and volunteers only.
Illinois income tax, sales tax and property tax
State income tax. Illinois does not require a separate state income tax exemption application for organizations holding federal 501(c)(3) status. What Illinois does tax is unrelated business income: file Form IL-990-T if you are exempt under section 501(a) and have unrelated business taxable income and either owe Illinois tax or must file a federal Form 990-T.
Sales tax: the E number, and it expires. Illinois genuinely does give qualifying nonprofits a sales tax exemption — apply on Form STAX-1 with your Articles, bylaws, a narrative of your purposes and activities, your IRS determination letter, promotional materials and your most recent financial statement. There is no application fee, processing can take up to 90 days, and the exemption is not retroactive, so apply early.
The trap: Illinois E numbers must be renewed every five years. Unlike states that issue a permanent certificate, Illinois lets an unrenewed E number expire, and organizations that never diarised the date lose tax-free purchasing and have to reapply. Renewal is available through MyTax Illinois.
Property tax. Not automatic. Apply on Form PTAX-300 (PTAX-300-R for religious organizations). The application goes first to the county Board of Review, which inspects the property and makes a recommendation, and then to the Illinois Department of Revenue, which makes the final determination. The property must be owned by a charitable organization and used exclusively for charitable purposes. Deadlines vary by county — Cook County, for example, runs four 30-day filing windows a year — so check with your county board of review rather than assuming a statewide date.
Illinois fees at a glance
| What | Cost |
|---|---|
| Name reservation (NFP 104.10, 90 days) | $25 |
| Articles of Incorporation (NFP 102.10) | $50 |
| Expedited filing service | +$25 |
| EIN | $0 |
| IRS Form 1023-EZ user fee | $275 |
| IRS Form 1023 user fee | $600 |
| Attorney General Form CO-1 | $15 |
| Attorney General Form AG990-IL | $15 per year |
| Sales tax exemption (STAX-1) | $0 |
| Annual report (NFP 114.05) | $10, $3 late penalty |
| Certificate of good standing | $5 |
A small Illinois nonprofit filing the 1023-EZ realistically spends about $340 to reach a determination letter and a live charity registration — one of the cheaper states, largely because the Attorney General's fees are so low. Compare in our 50-state registration fee guide.
A note on accuracy
State requirements and fees change over time. Use this as a roadmap, then verify current forms and amounts with Illinois' official agencies, or let us confirm them with you on a free call.
How long the whole thing takes
| Stage | Realistic range |
|---|---|
| Name check and optional reservation | Same day to a week |
| Articles of Incorporation, standard | Around ten business days |
| Articles of Incorporation, expedited (+$25) | Around 24 hours |
| EIN | Same day, online |
| Bylaws, policies, organizational meeting | One to two weeks |
| IRS determination, Form 1023-EZ | 80% within 22 days |
| IRS determination, full Form 1023 | 80% within 191 days |
| Sales tax E number (STAX-1) | Up to 90 days, not retroactive |
Two to eight weeks gets you incorporated and organized in Illinois. The IRS then adds one to seven months depending on which form you file — roughly two months on the 1023-EZ fast track, eight months or more on the full Form 1023.
Your annual compliance calendar
| Filing | Agency | When |
|---|---|---|
| Annual report, Form NFP 114.05 ($10) | Secretary of State | Before the first day of your incorporation anniversary month |
| Form AG990-IL ($15) | Attorney General | Within six months of fiscal year end |
| IRS Form 990, 990-EZ or 990-N | IRS | 15th day of the fifth month after fiscal year end |
| Form IL-990-T, if you have unrelated business income | Illinois Dept. of Revenue | With your federal 990-T |
| Sales tax E number renewal | Illinois Dept. of Revenue | Every five years |
Note that the Secretary of State's annual report is keyed to your incorporation anniversary month, not to your fiscal year — which is why a compliance calendar built around 31 December misses it. Our Form 990 guide explains which federal version applies.
Six mistakes Illinois founders make
- Filing the plain Secretary of State template. Illinois' boilerplate does not satisfy the IRS organizational test. Add the purpose and dissolution clauses before you file.
- Forming with fewer than three directors. Illinois requires three, full stop.
- Soliciting before registering with the Attorney General. Late initial registration carries a $200 penalty, and a launch fundraiser before Form CO-1 is filed is already late.
- Letting the sales tax E number lapse. Five years, no automatic renewal, no retroactive relief.
- Missing the anniversary-month annual report. It is not a calendar-year deadline, and repeated non-filing can lead to involuntary dissolution.
- Assuming property tax exemption follows automatically. It requires a PTAX-300 through your county board of review and a final decision by the Department of Revenue, on a county-specific timetable.
Starting a nonprofit in another state?
The federal steps are the same in all 50 states; only the state incorporation, tax exemption, and charitable registration details differ. See our guides for Michigan, Ohio, Texas, or browse all our guides. Book a free call and we will map the exact steps and current fees for your state.
This is general information, not legal or tax advice. Rules and fees change, so confirm current requirements with Illinois' agencies and the IRS, or with a qualified professional, before you file.