An 83(b) election is a short letter you file with the IRS to be taxed on restricted equity at grant, when it is usually worth very little, instead of later as it vests and grows. It is named after Internal Revenue Code Section 83(b).

For a founder with cheap, vesting stock, the election can be the difference between a trivial tax bill and a painful one. Without it, you can owe ordinary income tax on the value of each tranche as it vests, at whatever the stock is worth then.

The strict 30-day deadline

The deadline is unforgiving. You must file the election within 30 days of the date the stock is transferred to you. This 30-day window comes from the statute, and the IRS has no power to extend it. Miss it, and the election is generally gone.

What changed: 2016 and Form 15620

The mechanics changed in a founder-friendly way. Since 2016, you no longer have to attach a copy of the election to your income tax return. You still must file it with the IRS within 30 days and give a copy to your company. In late 2024, the IRS released Form 15620, a standardized form you may use to make the election, though a properly drafted letter still works.

When an 83(b) election makes sense

An 83(b) election only helps when your equity is subject to vesting or a similar risk of forfeiture. If your shares are already fully vested, there is nothing to elect. Filing also assumes you expect the stock to rise, since you pay tax now to avoid more tax later.

Founders often pair an 83(b) election with founder equity compensation and qualified small business stock planning, because the holding-period clock and the tax posture interact. This is a general explanation, not tax advice, and the 30-day deadline is absolute, so calendar it immediately.