TLDR
Starting a Connecticut nonprofit means filing a Certificate of Incorporation as a Connecticut nonstock corporation under Chapter 602 ($50), obtaining a federal EIN, applying to the IRS for 501(c)(3) status (Form 1023 at $600 or 1023-EZ at $275), registering with the Connecticut Department of Consumer Protection Public Charities Unit ($50), and applying for state sales tax exemption with the Department of Revenue Services (CERT-119). Connecticut requires audited financial statements with the annual charitable renewal when gross revenue exceeds $500,000 and a CPA review at $250,000 - thresholds lower than the federal single audit threshold.
Connecticut’s four-track formation
Connecticut nonprofit formation involves four regulatory tracks: state incorporation through the Secretary of the State, federal tax-exempt recognition through the IRS, state charitable registration through the Department of Consumer Protection, and state sales tax exemption through the Department of Revenue Services. The IRS sits in the middle and gates the state-level tax and charitable registration filings.
Connecticut’s friction comes from the audit and review thresholds - $250,000 for a CPA review and $500,000 for a full audit. These thresholds are well below the federal $1 million single audit threshold and catch growing nonprofits earlier than founders typically expect.
Step 1: Connecticut nonstock corporation under Chapter 602
Connecticut General Statutes Chapter 602 (the Revised Nonstock Corporation Act) governs Connecticut nonprofits. File a Certificate of Incorporation with the Connecticut Secretary of the State for $50.
The Certificate must include:
- Corporate name distinguishable on Connecticut SOTS records
- A statement that the corporation is a nonstock corporation under Chapter 602
- Purpose clause (include IRS 501(c)(3) language)
- Whether the corporation will have members
- Names and addresses of incorporators
- Registered agent and registered office in Connecticut
Connecticut General Statutes 33-1043 requires at least three directors. Recruit unrelated directors and document acceptance of board service.
Include the IRS 501(c)(3) language at the state filing stage. The Connecticut Secretary of the State will accept the Certificate without it, but the IRS will not grant 501(c)(3) status without the purpose, inurement, and dissolution clauses.
Step 2: Federal EIN and 501(c)(3) determination
Apply for the EIN immediately after incorporation. Free, instant.
Choose the 1023 path:
- Form 1023-EZ ($275): Under $50,000 projected receipts each year for three years, under $250,000 in assets. Decisions in 2-4 weeks.
- Form 1023 ($600): Full application. Decisions in 3-10 months.
The IRS determination letter is the gating document for both Connecticut DCP charitable registration and CERT-119 sales tax exemption.
Step 3: Connecticut DCP charitable registration
Connecticut Department of Consumer Protection, License Services Division, Public Charities Unit administers charitable registration. After receiving the IRS determination letter, file the initial Connecticut charitable registration ($50 initial fee).
Required information:
- IRS determination letter
- Officer and director roster
- Connecticut nonprofit corporation number
- Description of charitable purpose and programs
- Fundraising methods used in Connecticut
- Most recent IRS Form 990 (if available)
Registration must be in place before solicitation begins. The DCP processes initial registrations in 4-8 weeks in most cases.
Annual renewal and audit thresholds
Each year, the registration must be renewed with updated officer information, financial information, and the appropriate attachment based on revenue:
| Gross annual revenue | Required attachment |
|---|---|
| Under $250,000 | None beyond renewal |
| $250,000-$500,000 | CPA review report |
| Over $500,000 | Audited financial statement |
The renewal fee varies by revenue and is published on the DCP fee schedule. Renewal must be filed within 11 months of the close of the fiscal year.
Step 4: Connecticut sales tax exemption (CERT-119)
Connecticut imposes a 6.35% state sales and use tax. Qualifying 501(c)(3) nonprofits can claim exemption on qualifying purchases by completing CERT-119 and providing it to vendors at the point of sale.
Not every nonprofit purchase qualifies. The DRS publishes guidance on which purchases are exempt. Common exempt purchases include items used directly in the charity’s exempt purpose; common non-exempt purchases include items used in unrelated business activities.
CERT-119 is a self-issued certificate based on the IRS determination letter - there is no separate Connecticut application for sales tax exemption status itself.
Step 5: Ongoing Connecticut compliance calendar
| Filing | Frequency | Fee | Filed with |
|---|---|---|---|
| Connecticut SOTS annual report | Annual | $50 | Connecticut Secretary of the State |
| IRS Form 990 / 990-EZ / 990-N | Annual | $0 | IRS |
| Connecticut DCP charitable renewal | Annual | Varies by revenue | Connecticut DCP Public Charities |
| Audit or review (at threshold) | Annual | Engagement-based | Attached to DCP renewal |
| Connecticut withholding (if employees) | As scheduled | $0 | Connecticut DRS |
The SOTS annual report and the DCP charitable renewal do not share a due date. Calendar both separately. The DCP renewal aligns with the federal Form 990 filing in many cases - both follow the close of the fiscal year by several months.
Connecticut vs neighboring states
Connecticut’s audit thresholds are stricter than neighbors. New York requires an audit at $1 million in gross revenue; Massachusetts requires an audit at $500,000 in gross support and revenue; New Jersey at $1 million; Rhode Island at $500,000. Connecticut at $500,000 is in line with Massachusetts but stricter than New York and New Jersey.
For New England regional charities, Connecticut, Massachusetts, and Rhode Island typically anchor the registration roster, with New York and New Jersey added when solicitation crosses state lines.
Where founder time goes
Most founder time is spent on the IRS Form 1023, not the Connecticut-specific filings. The Connecticut Certificate of Incorporation, DCP charitable registration, and CERT-119 are administratively manageable once the IRS determination is in hand. The audit and review thresholds at $250,000 and $500,000 are the operational planning concern.
Budget $1,500-$5,000 for attorney-assisted full Form 1023 filings, $3,000-$8,000 for first-year CPA reviews at the $250,000 threshold, and $7,000-$15,000 for first-year audits at the $500,000 threshold.
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Source: Connecticut Secretary of the State Business Services fee schedule
Source: Connecticut Department of Consumer Protection, Public Charities Unit
Source: Connecticut General Statutes 21a-190 et seq., Solicitation of Charitable Funds Act
- Connecticut nonstock corporation
- A Connecticut corporation organized under Chapter 602 (the Revised Nonstock Corporation Act) that does not issue stock. The standard corporate form for Connecticut nonprofits.
DEFINITION
- DCP Public Charities Unit
- The Connecticut Department of Consumer Protection, License Services Division unit that administers charitable organization registration and oversight.
DEFINITION
- CERT-119
- The Connecticut Department of Revenue Services exemption certificate provided to vendors to claim sales tax exemption on qualifying nonprofit purchases.
DEFINITION
- Chapter 602
- Connecticut General Statutes Chapter 602, the Revised Nonstock Corporation Act, governing nonstock corporations including most nonprofits.
DEFINITION
“Connecticut's $250,000 review threshold is one of the lower thresholds nationally. Plan for the additional CPA cost as soon as the organization is on track to cross that line.”
“The DCP Public Charities Unit responds to questions reasonably quickly when the question is specific. Vague inquiries get vague responses.”
Q&A
Does Connecticut require a minimum number of directors?
Connecticut General Statutes 33-1043 requires nonstock corporations to have at least three directors. Best practice is a majority of unrelated directors to support IRS recognition and good governance.
Q&A
How does Connecticut handle out-of-state charities?
Charities formed outside Connecticut that solicit Connecticut donors must register with the DCP Public Charities Unit before solicitation, the same as Connecticut-formed charities. The corporate filings happen with the home state; the charitable registration happens with Connecticut DCP.
Q&A
Are religious organizations required to register?
Connecticut exempts certain religious organizations from charitable registration under specific statutory criteria. Religious organizations should review the exemption criteria with the DCP rather than assume the exemption applies.
Frequently asked