83(b) Elections Explained: What Founders Need to File and When

You accepted restricted stock or exercised your options early, and somewhere in the paperwork a lawyer mentioned you have “30 days to file an 83(b).” It’s a short form with outsized tax consequences, and the deadline does not move. That combination makes it feel bigger than it really is.

Knowing how to file an 83(b) election, and whether you should file one at all, comes down to a handful of clear points. The information here is educational, not tax advice, so confirm your own situation with a qualified tax advisor before you file. What follows is enough to understand the decision and act on it in time.

What is an 83(b) election?

An 83(b) election is a choice you make with the IRS to be taxed on your equity's fair market value (FMV) at the moment it is granted, rather than later, as it vests. It takes its name from Section 83(b) of the tax code, which governs how property you receive for your work gets taxed.

The reason the election exists comes down to a tax concept called “substantial risk of forfeiture”. For example, when you receive equity that vests over time, you could still lose it by leaving before your vesting schedule completes. 

The IRS treats stock subject to that risk as not fully yours yet, so by default it waits to tax you until each vesting date, when the risk lifts. An 83(b) election tells the IRS to disregard the vesting and tax the whole grant now.

How equity is taxed without an 83(b) election

Without an election, you pay tax as your shares vest. On each vesting date, the difference between the FMV of the shares that vested and what you paid for them counts as ordinary income, taxed at your ordinary income tax rate. 

For unvested shares from early-stage companies, this is where the math turns against you. If the value of the stock climbs between grant and vesting, each vesting event lands a larger tax bill, and you owe ordinary income tax on every dollar of that growth instead of the lower capital gains rate.

What changes when you file

When you file, you accept taxation up front on the spread between the grant-date FMV and your purchase price. For founders who buy restricted stock at or near its FMV at formation, that spread is often close to zero, which means little or no tax at grant. 

From there, you owe tax on future appreciation only when you sell, generally as long-term capital gains if you have held the shares long enough. Filing also starts your capital gains holding period at the grant date, which can matter for qualified small business stock and other favorable tax treatment down the line.

Who should consider filing an 83(b) election

An 83(b) election is a decision to weigh with a tax advisor, not a default setting. It applies to a specific set of situations, and it carries real downside in others.

Restricted stock and early-exercised options

The election applies to property that is subject to vesting at the time you receive it. Two common cases qualify. The first is a restricted stock grant that vests over a schedule, which is typical for founders and early employees who buy their shares directly. 

The second is early-exercised options, where you exercise before the options vest and receive unvested shares your company can repurchase if you leave. If you are weighing an early exercise, it helps to understand how stock options move from grant to exercise to sale before you commit, because the 83(b) clock starts the day those shares transfer to you.

The election does not apply to RSUs at grant, since restricted stock units are a promise to deliver shares later rather than a present transfer of property. It also does not apply to options you have not yet exercised. In both cases, there is no property to make the election on.

When an 83(b) election may not make sense

Filing tends to help when the value at grant is low, and you expect the company to grow. It tends to hurt when either assumption breaks. If you file, pay the tax, and then forfeit the shares by leaving before they vest, you generally do not get that tax back. 

The same logic applies if the value of the stock falls instead of rising: you prepaid tax on a number that never materialized. For anyone early-exercising incentive stock options, known as ISOs, there is an added wrinkle, since the bargain element can factor into the alternative minimum tax, or AMT. 

None of this makes the election wrong. It makes it a judgment call worth running past a tax professional who can see your full picture.

The 30-day deadline and why it matters

If you plan to file an election, you must do it within 30 days of the date the property is transferred to you, which is usually your grant or purchase date. There are no extensions, and the election is generally irrevocable once made. The 30-day deadline counts calendar days, not business days, so it moves faster than it sounds.

Miss the window and the choice is gone. Your equity reverts to the default treatment, taxed as it vests, potentially at a much higher value than it holds today. The stakes are real, but the response is straightforward: treat the grant date as day one, and give yourself margin rather than filing on day 29. Founders who start early rarely find this difficult.

How to file an 83(b) election

Filing means getting a complete, signed election statement to the IRS within the 30-day window and giving a copy to your company. Until recently, that meant drafting your own statement from IRS sample language. 

In November 2024, the IRS released Form 15620, the first standardized 83(b) election form, which reduces the guesswork about what information to include. Taxpayers can still file a self-drafted statement, but the form is the simpler path for most founders. You now have two routes.

Option 1: File online with Form 15620

The IRS has since opened electronic filing for Form 15620 through its website. You sign in with an ID.me account, complete the form, and submit it directly. Online filing gives you immediate confirmation that the IRS received your election, which removes the uncertainty that came with mailing. For most founders and service providers, this is the cleaner option.

Option 2: File by mail

You can still file by mail, using either Form 15620 or a self-drafted election statement. Send it to the IRS service center where you file your income tax return. Use certified mail with a return receipt so you have dated proof of timely filing, since the postmark is your evidence that you met the 30-day deadline. Keep the receipt.

Send a copy to your company and keep your records

Whichever method you choose, two steps do not change. You must provide a copy of the completed election to your company, since it affects how your employer reports your equity compensation and any tax withholding. 

You should also keep your own copy, along with proof of the filing date, with your permanent tax records. You do not attach the election to that year's tax return, but you will want the documentation if anyone asks.

Common 83(b) filing mistakes to avoid

Most problems come from a small set of avoidable errors:

• Missing the 30-day window. This is the one that cannot be fixed. Count from the transfer date and file early.
• Leaving out required information. The IRS can treat an incomplete election as invalid. Form 15620 helps here by prompting for each required field.
• Forgetting to send your company a copy. This is a filing requirement, not a formality.
• Filing when it does not apply. RSUs at grant and unexercised options are not eligible, so an election on them accomplishes nothing.
• Not keeping proof. Without a certified mail receipt or an online confirmation, you have no record that you filed on time.

83(b) elections and your equity records

A valid election depends on the exact grant date, the FMV of the shares at that date, and the documentation behind both. For private companies, that FMV usually comes from a 409A valuation, which sets a defensible per-share value for tax purposes. 

When those records are accurate and in one place, filing on time is simple. When they are scattered across email threads, spreadsheets, and a lawyer's inbox, day 29 gets stressful.

This is where clean equity records make the difference. Keeping grant dates, valuations, and vesting schedules on a single cap table means the numbers you need for an election are ready the moment you receive a grant, not reconstructed under a deadline. 

It also keeps your holding period and qualified small business stock timing traceable for later, when you sell. Pulley keeps that grant data in one place and can prepare a completed 83(b) form as part of the equity workflow, with your grant date and FMV already filled in. You still file it yourself, through your ID.me account, but Pulley preps the form so paperwork is a small task instead of a scramble.

An 83(b) election is easier when your grant dates, valuations, and equity records are already in one place. Pulley gives founders a clear, accurate view of their equity from day one, so filing on time is the easy part. See how it works with a quick demo. 

Frequently asked questions about 83(b) Elections

What is the deadline to file an 83(b) election?

You must file within 30 days of the date the property is transferred to you, which is typically your grant or purchase date. The deadline counts calendar days, allows no extensions, and cannot be met late. 

If day 30 falls on a weekend or holiday, confirm the timing with your tax advisor rather than assuming an extra day. The safest approach is to treat the grant date as your starting point and file well before the window closes.

Can I file an 83(b) election online?

Yes. The IRS now allows electronic filing of Form 15620 through its website, where you sign in with an ID.me account and submit the completed form directly. 

Online filing gives you immediate confirmation that the IRS received your election, which mailing does not. You can still file by mail if you prefer, using certified mail with a return receipt for proof of the filing date.

What happens if I miss the 83(b) election deadline?

If you miss the 30-day window, you lose the ability to make the election, and there is no late-filing option. Your equity reverts to the default treatment, taxed as it vests. That means the difference between the FMV at each vesting date and what you paid is taxed as ordinary income, which can be significantly higher than the tax at grant if the company has grown.

Do I need to file an 83(b) election for RSUs?

No. An 83(b) election does not apply to restricted stock units at grant, because RSUs are a promise to deliver shares in the future rather than a present transfer of property. There is nothing to make the election on until the units settle into actual shares. The election applies to restricted stock and to early-exercised options that leave you holding unvested shares.

Can an 83(b) election be revoked?

Generally, no. An 83(b) election is irrevocable once filed, except in narrow circumstances the IRS defines, such as certain mistakes of fact. This is why the decision deserves careful thought before you file, ideally with a tax advisor. Prepaying tax on equity you might forfeit, or that might lose value, is the main risk of filing when the situation does not warrant it.