Virginia is home to approximately 53,000 registered nonprofit organizations, with major concentrations in Northern Virginia, Richmond, Hampton Roads, and Charlottesville . The Commonwealth’s unique proximity to Washington, DC makes it a natural home for national associations, advocacy organizations, international NGOs, and government-adjacent nonprofits . 1. Incorporate with the Virginia State Corporation Commission (SCC) To form a nonprofit corporation in Virginia, you must file Articles of Incorporation with the Virginia State Corporation Commission (SCC) . The filing fee is $75 . Virginia uses the SCC rather than a Secretary of State for business filings . Annual Report Requirement: Virginia nonprofits must file an Annual Report with the SCC by the last day of the month in which the corporation was formed . The fee is $25 . Failure to file can result in automatic termination of the corporation . 2. Get Your Federal EIN Apply for an Employer Identification Number (EIN) from the IRS — free, takes minutes online . 3. Apply for Federal 501(c)(3) Status File IRS Form 1023 (or 1023-EZ for smaller organizations) . Processing time is typically 3-6 months. The filing fee is $600 for Form 1023 or $275 for Form 1023-EZ . 4. Apply for Virginia Tax Exemption Apply for Virginia sales tax exemption through the Virginia Department of Taxation . This is separate from your federal 501(c)(3) status—you must apply independently . Virginia’s state sales tax is 5.3% (4.3% state + 1% local) with rates up to 7% in some regions . 501(c)(3) organizations are generally exempt from Virginia corporate income tax . Virginia also offers property tax exemptions for qualifying nonprofits in many localities . 5. Register for Charitable Solicitation with VDACS Important: Virginia’s charitable solicitation registration is handled by the Virginia Department of Agriculture and Consumer Services (VDACS) , not the Attorney General . Initial registration: File Form 102 before soliciting contributions . The initial fee is $100 . Annual renewal: Renew annually . The renewal fee is $30 . Exemptions: Religious organizations and those raising less than $5,000 annually may be exempt from registration, provided they don’t use paid fundraisers . However, it’s good practice to register anyway for transparency and credibility with donors . Solicitation disclosures: Virginia law requires charitable organizations to include a specific disclosure statement in solicitation materials informing donors that financial information is available from VDACS . 6. Open a Nonprofit Bank Account in Virginia While Virginia nonprofits can open a business bank account with Articles of Incorporation and an EIN , a dedicated nonprofit account is essential for maintaining tax-exempt status, satisfying donor expectations, and meeting VDACS reporting requirements . Commingling personal and organizational funds can jeopardize your 501(c)(3) status . Documents needed: Articles of Incorporation filed with the Virginia SCC, EIN (IRS CP 575 or 147C), 501(c)(3) determination letter, bylaws signed by board, board resolution authorizing account opening and naming authorized signers, and government-issued photo ID for all authorized signers . Virginia nonprofits with 501(c)(3) status can apply for sales tax exemption and must present their exemption certificate at the time of purchase . Ongoing Compliance To maintain your Virginia nonprofit’s active status: File annual report with the SCC (due by the last day of the month in which your corporation was formed; $25 fee)  File IRS Form 990 series annually Renew charitable solicitation registration annually with VDACS  At Nova Tax & Accounting Services , we help Virginia nonprofits with Form 990 preparation and compliance with state registration requirements. Schedule your free consultation to discuss your organization’s needs.

Virginia Senate Bill 190, introduced in the 2026 legislative session, imposes significant new requirements on nonprofit organizations seeking to provide student support programs to public school students . The bill addresses growing concerns about student personal information and data security as more nonprofit organizations partner with school districts to deliver services. Overview of SB 190 The bill requires any nonprofit organization seeking to provide student support programs to students enrolled in a public elementary or secondary school to register and maintain status as a certified student support agency . This certification is required before a nonprofit can begin providing services to students. Certification Requirements To register and maintain status as a certified student support agency, nonprofit organizations must meet several requirements relating to the protection of student personal information . These include requirements relating to policies, procedures, and protocols for: The collection of student personal information The use and maintenance of student personal information The disclosure of student personal information The disposal of student personal information Handling any data breach or unauthorized disclosure Department of Education Oversight The bill requires the Virginia Department of Education to administer and oversee the certification of certified student support agencies . The Department is responsible for: Developing a model memorandum of understanding for each student support agency and school board establishing authorizations and limitations relating to the transmission, collection, and use of student personal information  Establishing and administering a grant program for student support agencies for data security upgrades, training for staff, and third-party audits  Establishing and administering compliance monitoring and enforcement mechanisms and subsequent penalties for noncompliance  Conducting a regular audit of a certain percentage of registered student support agencies to ensure compliance and establishing provisions relating to consequences for failure of the audit  MOU Requirements The bill requires each certified student support agency and school board to execute a memorandum of understanding in accordance with the model memorandum of understanding developed by the Department . Implications for Virginia Nonprofits Nonprofits that provide student support programs—including after-school programs, counseling services, tutoring, mentoring, and other student services—should prepare to comply with these new requirements. Key action steps include: Reviewing current data security policies and procedures Updating policies to meet the bill’s requirements Preparing to complete the certification process Budgeting for potential data security upgrades and training Monitoring Department of Education guidance on the model MOU Data Security Best Practices for Nonprofits Even before the bill takes effect, nonprofits serving students should implement strong data security practices: Encrypt all student data both in transit and at rest Limit access to student information on a need-to-know basis Train staff on data privacy and security protocols Maintain an incident response plan for data breaches Document all data collection, use, and disclosure practices Virginia Nonprofit Data Security Resources The Virginia Department of Education will provide guidance as the certification program is implemented. Nonprofits should also review Virginia’s data breach notification laws . At Nova Tax & Accounting Services , our consulting services can help nonprofit organizations review and strengthen their data security policies and prepare for new compliance requirements. Schedule your free consultation to discuss your organization’s needs.

After a hiatus of more than five years, the Internal Revenue Service released Revenue Procedure 2026-8 (RP 2026-8) on January 20, 2026, setting forth new guidance and requirements for group exemptions . The new rules add significant compliance requirements for nonprofits with chapter and affiliate networks. What Is a Group Exemption? An IRS group exemption allows a tax-exempt “central organization” to establish tax-exempt status for its affiliated “subordinate” organizations without the subordinate organizations having to apply individually for IRS recognition of exempt status . The IRS maintains more than 4,000 group exemptions providing exemption to more than 400,000 subordinate organizations . New Requirements for Central Organizations Under the new rules, a central organization must : Have at least five subordinate organizations to obtain a group exemption Maintain at least one subordinate at all times Maintain only one group exemption letter (transition relief applies to existing letters) New Definitions for Affiliation, Supervision, and Control RP 2026-8 introduces new definitions for key terms : Affiliation is now determined by a “facts and circumstances” standard looking at the relationship between the central and subordinate organization . General Supervision requires the central organization to annually obtain, review, and retain information on the subordinate organization’s finances, activities, and compliance with annual filing requirements; and annually transmit written information to, or educate, the subordinate organization about requirements to maintain tax-exempt status . A central organization may satisfy the first requirement by obtaining a copy of a subordinate organization’s Form 990 or 990-EZ—but Form 990-N does not satisfy the requirement . Control exists if the central organization appoints a majority of voting directors or officers, or there is a majority overlap of directors or officers, or there is a written agreement evidencing control . New Requirements for Subordinate Organizations To qualify as a subordinate organization, organizations must now satisfy : A uniform purpose statement requirement—all subordinate organizations that share the same purpose must have a uniform purpose statement in their governing instruments  Authorization for inclusion—each subordinate must authorize, in writing and signed by an officer, the central organization to include it in the group exemption and to remove it with or without cause  501(c)(4) subordinates must submit Form 8976, Notice of Intent to Operate Under Section 501(c)(4)  Prohibited Subordinate Types The following organizations are not eligible to be included in a group exemption : Organizations organized in a foreign country Private foundations Type III supporting organizations (previously eligible) Organizations whose exemptions have been automatically revoked for failure to file Form 990 Certain nonprofit health insurance organizations Special Rules for Churches Multiple sections in the new revenue procedure address churches specifically . A church may meet the “affiliated” requirement if a subordinate organization shares common religious bonds or convictions with the central organization . The revenue procedure provides a specific illustration for churches with subordinate organizations that are churches, schools, and hospitals, walking through how the supervision or control requirement may be met for each type . Transition Relief and Deadlines The IRS is providing a one-year transition period (January 20, 2026, to January 22, 2027) for existing central organizations to comply with several new requirements . Preexisting subordinate organizations are grandfathered from the uniform purpose statement requirement, the prohibition against including Type III supporting organizations, and the authorization requirement . Annual Reporting and Filing Deadlines The final revenue procedure also incorporates new requirements for annual group exemption information update filings . Central organizations must submit Supplemental Group Ruling Information (SGRI) at least annually, reporting changes in subordinate organizations . The annual update must be filed electronically once the IRS issues guidance for electronic submission . Practical Steps for Affected Organizations Central organizations should take immediate steps to : Inventory all subordinate organizations Confirm consistent Section 501(c) classification Document supervision and control arrangements Prepare for enhanced annual reporting before the January 2027 deadline Develop or update uniform purpose statements for subordinates sharing the same purpose Obtain written authorization from each subordinate for inclusion and removal At Nova Tax & Accounting Services , we help nonprofit organizations navigate these new group exemption requirements. Our assurance and compliance services include guidance on maintaining group exemption letters. Schedule your free consultation to discuss your organization’s compliance needs.