Tax & credits

83(b) election

Also known as Section 83(b) election, Form 15620 election

An 83(b) election tells the IRS to tax restricted stock at its (usually tiny) value on the grant date rather than as it vests.

Parag Jain, CPA
Parag Jain, CPAFounder, Zinance·Last updated September 2026
Summarize this article

Key takeaways

  1. Must be filed within 30 calendar days of grant/purchase, no exceptions
  2. For founders holding stock subject to vesting, a missed 83(b) can create a large, recurring ordinary-income tax bill as shares vest and appreciate, plus it delays the clock for long-term capital gains and QSBS treatment.

What is 83(b) election?

An 83(b) election tells the IRS to tax restricted stock at its (usually tiny) value on the grant date rather than as it vests. Founders and early employees must file within 30 days of the grant or early exercise, a strict deadline with no extensions, to lock in a low tax basis and start the capital-gains and QSBS holding clocks.

Worked example

A founder receives 8,000,000 shares of restricted stock at $0.0001 par value, worth $800 total. Filing an 83(b) within 30 days, she pays tax on just $800 today. Without it, she'd owe ordinary income tax as shares vest, potentially on hundreds of thousands of dollars once the stock appreciates, at ordinary rates instead of capital gains.

Benchmarks by stage

The election must be filed with the IRS within 30 days of the transfer/grant, the deadline is strict with no extensions or hardship relief. The IRS released standardized Form 15620 in November 2024 (later revised April 2025) to make the election, though a custom written statement is still permitted.

Source: IRC Sec. 83(b); IRS Form 15620 (2025) (2026)

How to file the election

Five steps, and the fourth is the one people skip and later regret.

  1. Fix the transfer date. The 30 days run from the transfer of the property, not from when you signed a term sheet, remembered to ask, or received a certificate. This is the fact most often reconstructed wrongly after the event.
  2. Prepare the election on IRS Form 15620, or as a written statement containing everything section 83(b) requires. The form is voluntary but removes the most common failure mode, which is a home-made statement missing a required element.
  3. File it with the IRS within 30 days. If day 30 falls on a Saturday, Sunday or legal holiday, the election is timely if postmarked the next business day.
  4. Send it in a way that produces dated proof of mailing. Proving timeliness later is the whole game, and the person who will ask for the evidence is a buyer's tax counsel during diligence, years from now.
  5. Give a copy to the company and keep your own permanently.

There is no late relief

An election filed on day 31 is not a late election, it is no election at all. The IRS grants no general extension or hardship relief for a missed 83(b), and the election is irrevocable in the other direction too.

For the full arithmetic — a worked four-year vesting schedule showing $100 of income with the election against $4,875,000 without it — the interaction with QSBS holding periods, and when the election is the wrong call, see the 83(b) election: the 30-day deadline founders miss.

Why it matters for fast-growing companies

For founders holding stock subject to vesting, a missed 83(b) can create a large, recurring ordinary-income tax bill as shares vest and appreciate, plus it delays the clock for long-term capital gains and QSBS treatment. Filing on time is one of the cheapest, highest-leverage tax moves a startup founder makes, and the 30-day window is unforgiving.

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Frequently asked questions

What is the deadline to file an 83(b) election?+
You must file within 30 calendar days of the stock grant or early exercise, counting the day after the grant as day one. The deadline is strict: the IRS grants no extensions, hardship exceptions, or late relief, and courts have consistently refused to excuse missed filings, so treat it as an absolute cutoff.
Who should file an 83(b) election?+
Founders and early employees who receive restricted stock subject to vesting, or who early-exercise stock options, when the current value is low. Filing locks in tax at that low value. It generally isn't relevant to standard RSUs or unexercised options, which don't involve a current transfer of stock.
What happens if I miss the 83(b) deadline?+
You lose the election permanently for that grant. You'll instead be taxed at ordinary income rates on the stock's value as it vests, which can be far higher if the company has grown, and your long-term capital gains and QSBS holding periods start later. There is no way to file late.

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