The 83(b) election is a one-page filing with a 30-day deadline and no possibility of an extension. Get it right and your equity is taxed as capital gain when you eventually sell. Miss it and you can owe hundreds of thousands of dollars in ordinary income tax on stock you cannot sell to pay the bill. The process also changed recently, and most guides still describe the old one.
Quick Highlights
The deadline is 30 calendar days from the transfer date — usually board approval, not your signature date. No extensions, no relief, no exceptions.
You can now file online. The IRS released Form 15620 in late 2024 and added electronic filing through an IRS online account in 2025. A traditional election letter still works too.
The printed form is out of date. Form 15620's "Where to File" section says mail only because it predates the online channel. Both methods are valid — just never use both.
Missing it is expensive: in a typical founder scenario, roughly $1.6 million in tax owed in cash across four years, on stock that cannot be sold.
You no longer attach it to your tax return — that requirement ended in 2016 — but you must still give a copy to your company.
What an 83(b) election does
When you receive stock that vests over time, the default tax rule is unkind. You are taxed as each tranche vests, on the difference between the fair market value at that moment and what you paid. Your company grows, your share price grows, and your tax bill grows with it — on stock you cannot sell.
An 83(b) election flips the timing. You elect to be taxed at the moment of transfer instead, when the stock is worth almost nothing.
In the IRS's own words, the election lets you "currently include in gross income the excess (if any) of the property's fair market value at the time of the transfer over the amount (if any) paid for the property at the time of transfer, rather than when the property later becomes substantially vested."
For a founder buying stock at $0.0001 per share on day one, that means paying tax on approximately nothing, and converting everything that follows into long-term capital gain.
Who can file one
Founders with restricted stock subject to vesting. The core case.
Early exercisers of stock options. Exercising unvested options produces restricted stock, which is eligible.
Contractors and advisors receiving restricted equity.
Who cannot:
RSU holders. An RSU is a contractual promise, not a transfer of property. There is nothing to elect on, and filing has no legal effect.
Holders of fully vested stock. If it is not subject to a substantial risk of forfeiture, there is nothing to accelerate.
The 30-day deadline
The rule, verbatim from the IRS: an 83(b) election "must be filed no later than 30 days after the date the property was transferred."
Three things founders get wrong about this:
It runs from the transfer date, not your signature date. For founders this is usually the board approval or share issuance date. If you sign a stock purchase agreement two weeks after the board approved the issuance, you have already burned half your window.
Thirty days means thirty calendar days. Not a month, not thirty business days. The only flex is that if day 30 falls on a Saturday, Sunday, or legal holiday, the election is timely if postmarked the next business day.
There are no extensions. None. No late relief, no reasonable cause exception, no hardship provision. Courts have consistently declined to create one. This is among the harshest deadlines in the tax code, and it is aimed at people who are simultaneously incorporating a company, hiring, and raising money.
Revocation is nearly as unforgiving: an election may not be revoked except with IRS consent.
How to file, as of 2026
This is the part where most guides are out of date, because two things changed recently.
Form 15620 now exists
In November 2024 the IRS released Form 15620, Section 83(b) Election — the first standardized form for this purpose. The current revision is April 2025.
Using it is optional. The form says so directly: "Form 15620 is provided by the IRS for your convenience and its use is voluntary." A properly drafted election letter meeting the regulatory requirements remains perfectly valid.
Online filing now exists
Since mid-2025, Form 15620 can be filed electronically through an IRS online account. You sign in, complete a guided questionnaire that populates the form, and submit — or download it to mail instead. An IRS online account with identity verification is required.
This is a genuine improvement. The historic failure mode for 83(b) elections was a paper letter lost in the mail with no proof it was sent on time. Electronic submission produces an immediate record.
A confusing detail worth knowing
The printed Form 15620 still says, in its "Where to File" section, to submit it by mail. That text predates the online filing channel and has not been updated. So the IRS's form and the IRS's website describe different processes.
Both work. If you read the PDF and conclude that e-filing does not exist, that is the form being stale, not you misreading it.
Your three options
Online
IRS online account, complete and submit Form 15620 electronically
Mail Form 15620
Print and mail to the IRS center where you file your return
Mail a custom letter
A statement meeting the regulatory requirements, same address
Online
IRS online account, complete and submit Form 15620 electronically
IRS-preferred. Requires identity verification. Immediate record.
Mail Form 15620
Print and mail to the IRS center where you file your return
Use Certified Mail with return receipt, and get a counter postmark at the post office
Mail a custom letter
A statement meeting the regulatory requirements, same address
Still valid. Cannot be filed electronically.
Do not use more than one method. Filing both online and by mail causes processing problems. Pick one.
Two more requirements
Give a copy to your company. Still mandatory. The form's signature block commits you to providing a copy to the person for whom the services are performed. Your company needs it for its own records and its payroll treatment.
Do not attach it to your tax return. This requirement was eliminated in 2016 for property transferred on or after January 1, 2016. Many guides still tell you to attach it. They are running on a decade-old rule.
So: file within 30 days, send your company a copy, keep your proof. That is the whole obligation.
What missing it actually costs
Here is the arithmetic, using a founder with 1,000,000 shares purchased at $0.0001 per share ($100 total), vesting 25% per year over four years. Assume the share price grows to $0.50, $2.00, $5.00, and $10.00 at each vesting date, and the company eventually sells at $10.00 per share.
With a timely 83(b) election
Tax at grant: fair market value of $100 minus $100 paid equals $0 of income. No tax at grant, no tax at any vesting event.
At sale for $10,000,000:
```
Long-term capital gain $10,000,000 - $100 = $9,999,900
Tax at 20% = $1,999,980
Cash needed before the sale = $0
```
Without it
Ordinary income at each vesting date, at that date's value:
Year 1
250,000
Year 2
250,000
Year 3
250,000
Year 4
250,000
Total
1,000,000
Year 1
250,000
$0.50
$124,975
Year 2
250,000
$2.00
$499,975
Year 3
250,000
$5.00
$1,249,975
Year 4
250,000
$10.00
$2,499,975
Total
1,000,000
$4,374,900
At a 37% federal rate that is roughly $1,618,713 in ordinary income tax, due in cash across four years, on stock that cannot be sold. Payroll and state taxes come on top.
Your basis does increase, so the eventual capital gain shrinks:
```
Basis $100 + $4,374,900 = $4,375,000
Capital gain $10,000,000 - $4,375,000 = $5,625,000
Tax at 20% = $1,125,000
```
Side by side
Tax during vesting
$0
Tax at sale
$1,999,980
Total federal tax
~$1,999,980
Cash owed before any liquidity
$0
Tax during vesting
$0
~$1,618,713
Tax at sale
$1,999,980
$1,125,000
Total federal tax
~$1,999,980
~$2,743,713
Cash owed before any liquidity
$0
~$1,618,713
About $744,000 more tax overall — but the number that actually destroys people is the second one. Owing $1.6 million in cash, years before any liquidity event, on an asset you are legally prohibited from selling.
The mistakes that cost the most
Missing the 30 days. No cure exists.
Counting from the wrong date. The clock starts at transfer, typically board approval, not when you signed.
Filing for RSUs. Ineligible, and the filing does nothing.
Skipping the company copy. Still required.
Filing twice, online and by mail, which creates processing problems.
Keeping no proof. Without a receipt or an electronic record you cannot demonstrate timely filing years later, when diligence asks.
Attaching it to your 1040. Not required since 2016.
Not thinking about forfeiture. If you leave before vesting, tax paid at grant on forfeited shares is generally not recoverable. With a near-zero grant value this is trivial; with a high grant value it is a real risk.
How incorporation services handle it
[Stripe Atlas](/blog/stripe-atlas-review) files the 83(b) automatically for every C corp founder at no extra charge, using Certified Mail with tracking, typically within 10 business days of the share purchase. Proof of filing is stored permanently in your dashboard. Stripe explicitly tells founders not to use Atlas if they do not want an 83(b) filed, because it is not optional.
[Clerky](/blog/clerky-review) generates a pre-filled 83(b) form with detailed instructions and sends reminders — but you mail it yourself. Clerky sells a managed filing add-on that handles the physical process and stores the evidence, though it does not publish the price. Clerky's own framing of why the add-on exists is worth repeating: "making a valid 83(b) election is different from being able to prove it."
[Rho](https://www.rho.co/product/incorporation) files 83(b) elections as part of incorporation, so the 30-day clock is not yours to track. Incorporation is free, with a $400 refundable deposit returned once you open a Rho account and maintain a $10,000 average checking balance for 60 days. Every document is reviewed by a licensed attorney, registered agent year one is included, your EIN application is filed for you, and about 80% of filings complete within 24 hours. Your business account opens in the same flow, so you can bank the same day.
If you are choosing a service and equity paperwork makes you nervous, this specific difference deserves more weight than a $100 price gap. Compare the full field in our guide to the best incorporation services for startups.
The one-line version
If you have restricted stock that vests, file the 83(b) within 30 days of the transfer date, send a copy to your company, and keep proof. It is the highest-value 30 minutes of paperwork in startup formation, and the only one with a deadline that cannot be fixed.
FAQs
The election becomes permanently unavailable. The 30-day deadline runs from the date your stock was transferred, usually the board approval date, and there are no extensions, no late relief, and no reasonable cause exception.
Without the election you are taxed under the default rule: ordinary income at every vesting event, measured at that date's fair market value. For a founder with 1,000,000 shares vesting over four years while the share price climbs from $0.0001 to $10.00, that is roughly $4.37 million of ordinary income and about $1.6 million in federal tax, due in cash, on stock that cannot be sold.
Your basis does increase, which reduces the eventual capital gain, but the total tax is still several hundred thousand dollars higher and the cash is owed years before any liquidity event. Missed 83(b) filings also surface during investor due diligence and typically must be resolved before a financing closes.
An 83(b) election is a filing with the IRS that lets you choose to be taxed on restricted stock at the time of transfer rather than as each tranche vests. For founders who receive stock at a near-zero value, this typically means paying little or no tax at grant and converting future appreciation into long-term capital gain.
Founders with restricted stock subject to vesting, employees or contractors who early exercise unvested stock options, and advisors receiving restricted equity are all eligible. RSU holders and holders of fully vested stock cannot file a valid 83(b) election.
You must file within 30 calendar days of the date your stock was transferred, which is typically the board approval or share issuance date rather than the date you signed your stock purchase agreement. There are no extensions, no late relief, and no exceptions.
You have three options: file Form 15620 electronically through an IRS online account, mail Form 15620 to the IRS center where you file your return, or mail a custom election letter meeting the regulatory requirements. Do not use more than one method, as filing both online and by mail creates processing problems.
No. That requirement was eliminated in 2016 for property transferred on or after January 1, 2016. You do still need to give a copy to your company, and you should keep proof of timely filing for your own records.
Form 15620 is the IRS's standardized form for making a Section 83(b) election, released in November 2024 with a current revision of April 2025. Using it is optional, and a properly drafted election letter that meets the regulatory requirements remains valid.
No. An RSU is a contractual promise rather than a transfer of property, so there is nothing to elect on and filing has no legal effect.
Yes. Rho files 83(b) elections as part of its incorporation service, so the 30-day deadline is not something founders need to track themselves. Incorporation through Rho is free, with a $400 refundable deposit returned once you open a Rho account and maintain a $10,000 average checking balance for 60 days. Every document is reviewed by a licensed attorney, and about 80% of filings complete within 24 hours.