TLDR
Illinois charities register with the Attorney General's Charitable Trust Bureau under both the Charitable Trust Act and the Solicitation for Charity Act, and file Form AG-990-IL annually. CPA review and audit thresholds are tiered: review at $300,000 in contributions, full audit at $300,000 with paid solicitor or $25,000 paid to professional fundraiser. The Department of Revenue handles sales-tax exemption (Form STAX-1). Major federal pass-throughs flow through DHS, IDPH, ISBE, and DCFS, all carrying full Uniform Guidance obligations.
Illinois adds a layer that most states lack: the Grant Accountability and Transparency Act (GATA), which standardizes subrecipient monitoring across state agencies and requires registration in the GATA portal before most state-administered awards. Combined with the unusual June 30 AG-990-IL deadline (one month after the federal Form 990) and the tiered audit thresholds tied to use of professional fundraisers, Illinois compliance has its own rhythm.
This FAQ collects the questions Illinois executive directors and grants managers actually ask in the first year. Every answer is grounded in Illinois statute, IRS guidance, or state agency publication, with sources cited so you can verify the current rule.
Where to go next
- The Illinois state hub: GrantPipe for Illinois nonprofits
- Step-by-step setup: Illinois nonprofit startup guide
- Audit thresholds across states: Nonprofit audit requirements by state
- Free download: Illinois compliance checklist
Implementation realities and migration notes
Mid-sized nonprofits in this category typically inherit a tangle of restricted-fund histories: federal pass-throughs, state agency contracts, family-foundation grants, and partner funding stretching back many years. Migrating that history cleanly is not optional — auditors and program officers will ask questions that require a year-by-year reconstruction. Implementation timelines run six to ten weeks for organizations that scope the data inventory before signing. Cutting corners on migration to chase a fast launch usually surfaces gaps during the next single-audit cycle, and the cost of fixing those gaps after the fact is meaningfully higher than doing migration right at the start.
Plan accordingly, and require any vendor on the shortlist to demonstrate restricted-fund handling, grant tracking, and donor record migration on a representative sample of your actual historical data before you sign. Vendors that decline to demo on real data are filtering you out for a reason. The demo on your data is where the gaps surface — both the gaps in the vendor’s product and the gaps in your existing records that you will need to clean up regardless of which system you choose. Use that demo to set realistic expectations with the board and the audit committee about timeline and scope before contracts get signed.
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Frequently asked
Frequently Asked Questions
Do I have to register with the Illinois Attorney General?
Yes, in most cases. Illinois has two registration regimes administered by the Charitable Trust Bureau of the Attorney General's office. The Charitable Trust Act (760 ILCS 55) requires charitable trusts and most charitable organizations holding $4,000 or more in assets to register. The Solicitation for Charity Act (225 ILCS 460) requires charities soliciting contributions in Illinois to register before soliciting. Most operating 501(c)(3) charities register under both — using a single Form CO-1 (Charitable Organization Registration Statement).
What is Form AG-990-IL and when is it due?
Form AG-990-IL is the annual financial report filed with the Illinois Attorney General's Charitable Trust Bureau. It is due 6 months after fiscal year end (June 30 for calendar-year filers — different from the federal 990 deadline of May 15). The form requires a copy of Form 990 and audited financials or CPA review where required. The filing fee is $15. Late filings accrue a $100 late fee. Continued non-filing leads to suspension of the right to solicit and revocation of registration.
What are Illinois's audit and review thresholds?
Under 225 ILCS 460/4, organizations with annual contributions of $300,000 or more must submit audited financial statements with AG-990-IL. Organizations using a paid solicitor and receiving any contributions must submit audited financials regardless of size. Organizations with contributions of $25,000 or more that pay a professional fundraiser must also submit audited financials. Organizations with contributions between $25,000 and $300,000 (and no paid fundraiser) may submit a financial statement reviewed by an independent CPA in lieu of an audit.
How does Illinois sales-tax exemption work for nonprofits?
A 501(c)(3) organization applies separately to the Illinois Department of Revenue for an exemption identification (E) number using Form STAX-1. Once issued, the organization presents the E-number to vendors when purchasing taxable items used by the exempt organization. The exemption applies to purchases for the organization's exclusive use; it does not exempt sales by the nonprofit. Resale of donated items by qualifying organizations may be exempt under specific provisions.
Are Illinois nonprofits exempt from property tax?
Not automatically. Under 35 ILCS 200/15-65, property used exclusively for charitable, educational, religious, or other qualifying purposes by a qualifying organization is eligible for exemption. The nonprofit applies to the Illinois Department of Revenue (not the local assessor) using Form PTAX-300, with the local assessor's recommendation. Annual filing of an Affidavit of Use (PTAX-300A) confirms continued exempt use. Cook County has additional local procedures.
How does payroll registration work in Illinois?
Federal: EIN and EFTPS. State: register with the Illinois Department of Employment Security (IDES) for unemployment insurance and the Illinois Department of Revenue for state income tax withholding using Form REG-1. 501(c)(3) organizations may elect the reimbursing-employer method for unemployment under 820 ILCS 405/1404. Workers' compensation is mandatory for most employers. Cook County and the City of Chicago add separate paid-leave and minimum-wage requirements that interact with payroll administration.
How do I incorporate a nonprofit in Illinois?
File Articles of Incorporation under the General Not For Profit Corporation Act of 1986 (805 ILCS 105) with the Illinois Secretary of State, $50 filing fee. The articles must specify the corporation's purposes within the categories allowed by Section 103.05 and include the IRS-required dissolution language. After incorporation, draft bylaws, hold an organizational meeting, file IRS Form 1023 for federal exemption, register with the AG Charitable Trust Bureau, and apply to the Department of Revenue for state sales-tax exemption.
What is the minimum board size for Illinois nonprofits?
Three directors is the minimum under Section 108.10 of the General Not For Profit Corporation Act. Directors do not have to be Illinois residents. The corporation must have a president, secretary, treasurer, and any other officers the bylaws specify; the same person may not be both president and secretary. The board may act by written consent or by remote means if the bylaws permit. Standard practice for grant-funded nonprofits is at least 5–7 directors with documented independence.
Are there fiscal-year quirks for Illinois nonprofits?
Yes — the AG-990-IL deadline is unusual. It is due 6 months after fiscal year end (June 30 for calendar-year filers), which is one month later than the federal Form 990 deadline of May 15 for calendar-year filers. The Illinois Secretary of State annual report is due before the first day of the corporation's anniversary month, on a separate cycle. Illinois nonprofits commonly mis-time these three deadlines. The AG accepts a copy of the federally-extended 990 once filed.
How do federal grants flow through Illinois state agencies?
Major Illinois pass-through agencies include the Department of Human Services (DHS) for SNAP, TANF, mental health, and developmental disabilities; the Department of Public Health (IDPH); the Illinois State Board of Education (ISBE); the Department of Children and Family Services (DCFS); the Illinois Housing Development Authority (IHDA) for HUD pass-throughs; and the Department of Commerce and Economic Opportunity (DCEO). The Grant Accountability and Transparency Act (GATA) layers Illinois-specific subrecipient monitoring on top of federal Uniform Guidance.
What is GATA and how does it affect Illinois nonprofits?
The Grant Accountability and Transparency Act (30 ILCS 708) is Illinois's framework for state and federal grant subrecipients. Subrecipients of state-administered awards complete the GATA portal registration, including a fiscal and administrative risk assessment, internal controls questionnaire (ICQ), and Programmatic Risk Assessment. GATA monitoring requirements apply on top of 2 CFR 200 (Uniform Guidance) for federal awards passed through Illinois agencies. The GATA Grantee Portal is the central submission point — registration is required before most state awards are issued.
What state-funded grant programs should Illinois nonprofits know?
Illinois Arts Council Agency operating support and project grants; Illinois Department of Human Services community-based behavioral health, youth, and senior services contracts; ISBE 21st Century Community Learning Centers; Illinois Criminal Justice Information Authority (ICJIA) victim services and prevention grants; IHDA capital and operating grants for affordable housing; DCEO workforce and community development grants; Illinois Department of Public Health prevention and equity grants. Most flow through GATA-registered agencies.
Where do Illinois nonprofits file annual reports?
Three places. (1) IRS — Form 990, 990-EZ, or 990-N. (2) Illinois Attorney General — AG-990-IL plus 990 attachment and audit/review if required. (3) Illinois Secretary of State — annual report by the first day of the corporation's anniversary month. The Charitable Trust Bureau publishes a public charity database at illinoisattorneygeneral.gov where donors and grantmakers can verify registration status.
What is the most common Illinois nonprofit compliance mistake?
Confusing the AG-990-IL deadline with the federal 990 deadline. The Illinois Charitable Trust Bureau allows 6 months after fiscal year end, while the IRS allows 4.5 months. Founders set a single calendar reminder for May 15 and assume both filings are covered, then either rush AG-990-IL early without audited financials, or miss it entirely thinking it was filed with the IRS. The two filings go to different agencies; a 990 filed with the IRS is not transmitted to the Illinois AG.
Do Illinois professional fundraisers register separately?
Yes. Professional fundraisers and professional fundraising consultants must register with the Charitable Trust Bureau before soliciting in Illinois under 225 ILCS 460. Professional fundraisers post a $10,000 surety bond. Charities that contract with a professional fundraiser file the contract with the AG within 10 days of execution. The use of a paid solicitor lowers the audit threshold — any contributions received with a paid solicitor's involvement trigger the audit requirement. Verify the fundraiser's registration before signing.
What are Illinois's rules on raffles and games of chance?
The Raffles and Poker Runs Act (230 ILCS 15) authorizes municipalities and counties to license qualifying nonprofit organizations to conduct raffles. The local government issues the license; the state Department of Revenue does not. Each municipality has its own license fee, prize limits, and reporting requirements. Bingo is licensed by the Illinois Department of Revenue under the Bingo License and Tax Act. Charitable games (one-time licensed casino-style nights) are also regulated separately.
What records must Illinois nonprofits keep?
Section 107.75 of the General Not For Profit Corporation Act requires every Illinois nonprofit corporation to keep correct and complete books and records of accounts, minutes of the proceedings of its members, board, and committees, and a record of names and addresses of members entitled to vote. Records are subject to inspection by directors and members. The Charitable Trust Bureau requires retention sufficient to support the AG-990-IL — standard practice is at least seven years for financial records, permanently for board minutes.
Does the Illinois Open Meetings Act apply to nonprofits?
Generally no. The Illinois Open Meetings Act (5 ILCS 120) applies to public bodies. A private 501(c)(3) is not a public body. Exceptions exist for nonprofits acting as governmental subdivisions and for certain hospital boards under specific statutes. Public Records Act-equivalent (the Freedom of Information Act, 5 ILCS 140) similarly applies to public agencies. Nonprofits with government-appointed boards or that hold public functions should obtain a fact-specific legal review.
How long does Illinois 501(c)(3) determination take?
501(c)(3) determination is a federal IRS process. Form 1023 typically takes 6 to 12 months; Form 1023-EZ typically takes 2 to 4 weeks. Illinois state-level work — Secretary of State incorporation, AG registration, Department of Revenue sales-tax exemption — typically completes within 4 to 8 weeks. Many Illinois nonprofits register with the AG based on a pending Form 1023 and update once the IRS letter issues. The federal determination is the longest pole.
What about Cook County and Chicago-specific compliance?
Nonprofits operating in Cook County navigate the Cook County Property Tax Appeal Board for property exemption appeals and the Cook County Assessor for initial review. The City of Chicago has its own paid sick leave, minimum wage, and Fair Workweek ordinances that apply to most employers. Chicago door-to-door solicitation is regulated by the Department of Business Affairs and Consumer Protection. Federal grants flowing through the City of Chicago carry the City's own M/WBE goals on top of federal procurement rules.
How does GrantPipe help Illinois nonprofits stay compliant?
GrantPipe tracks every grant award alongside the program funds it supports, surfaces deadlines for federal pass-throughs from DHS, IDPH, ISBE, DCFS, IHDA, and DCEO, and produces audit-ready schedules for the Illinois CPA review at $25,000–$300,000, audit at $300,000, and the federal Single Audit at $1,000,000. It accommodates the GATA portal documentation workflow and the unusual June 30 AG-990-IL deadline for calendar-year filers.
Where can I read the underlying Illinois statutes and forms?
Charitable Trust Act (760 ILCS 55), Solicitation for Charity Act (225 ILCS 460), General Not For Profit Corporation Act (805 ILCS 105), and Grant Accountability and Transparency Act (30 ILCS 708) on ilga.gov. Charitable Trust Bureau forms at illinoisattorneygeneral.gov/charities. Department of Revenue exempt organization forms at tax.illinois.gov. Secretary of State filings at ilsos.gov. GATA portal at gata.illinois.gov. IDES employer registration at ides.illinois.gov.