PA Act 104 of 2026: Nonprofit Audit and Financial Reporting Thresholds

Written by Megan E. Senkowski, CPA

On October 22, 2026, Pennsylvania Governor Josh Shapiro signed Act 104 of 2026 into law, raising the annual contribution thresholds that determine financial statement reporting requirements for charitable organizations.

The legislation amends Pennsylvania’s Solicitation of Funds for Charitable Purposes Act, updating thresholds that have remained unchanged since 2017.

Under the new law, the annual contribution thresholds are:

• $1 million or more: An independent audit is required.
• $500,000 to less than $1 million: A review or audit is required.
• $150,000 to less than $500,000: A compilation, review, or audit is required.
• Less than $150,000: A compilation, review, or audit is optional under these provisions.
  
  

The legislation is intended to reduce financial reporting burdens for certain charitable organizations while maintaining financial transparency and accountability.

Why Were Pennsylvania's Nonprofit Reporting Thresholds Increased?

Pennsylvania's financial reporting thresholds had not been updated since 2017. The legislation is intended to modernize these requirements, reduce unnecessary financial reporting burdens for certain charitable organizations, and allow nonprofits to direct more resources toward their missions while maintaining financial transparency and accountability.

When Does Act 104 Take Effect?

Act 104 takes effect on February 19, 2027, 120 days after the governor's signature, and applies to contributions received in calendar years beginning after the effective date.

While the legislation establishes the new thresholds and effective-date provisions, their application to specific nonprofit financial reporting periods, particularly for organizations with fiscal year-ends, requires further consideration.

Trout CPA is reviewing these implementation considerations and will provide additional guidance as the reporting implications are clarified.

What Does This Mean for Your Organization?

The increased thresholds may reduce state financial reporting requirements for certain Pennsylvania charitable organizations. However, organizations should evaluate their individual circumstances and any other applicable audit or financial reporting obligations before making changes to their reporting arrangements.

If you have questions about how these changes may affect your organization's financial reporting requirements, please contact Trout CPA to speak with one of our nonprofit accounting professionals.