The 83(b) Election for US Founders: The 30-Day Deadline Explained
The short answer
An 83(b) election lets a founder who receives stock subject to vesting be taxed on its value when the shares are transferred, rather than as they vest. It must be filed with the IRS no later than 30 days after the transfer, with no routine extension. File it (the IRS now offers Form 15620), give a copy to the company, and keep proof of filing.
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- The 30-day clock starts when the stock is transferred to you, often the issuance date, not the date you sign or start vesting.
- Missing the deadline usually cannot be fixed later.
- The IRS offers Form 15620 for the election; a qualifying written statement also works.
- You no longer attach the election to your tax return for transfers after 2015, but you must give the company a copy.
- Founders agree vesting, equity split and the 83(b) plan together, before shares are issued.
What is an 83(b) election?
Section 83 of the Internal Revenue Code taxes property received for services. When founders receive shares that can be forfeited if they leave (vesting), the default is that tax is measured as the shares vest, at their value on each vesting date. If the company grows, that can mean tax on a large paper value years later, with no cash to pay it.
An 83(b) election changes the timing. You choose to be taxed when the shares are transferred, on their value then minus what you paid. At incorporation, founders often pay fair market value for their shares, so the taxable amount at transfer can be small or zero. Whether the election suits you depends on your facts, so take tax advice.
When is the 83(b) deadline?
The rule comes from Treasury Regulation 1.83-2: the election must be filed no later than 30 days after the date the property was transferred. Founders' guides from Carta and law firms stress the same practical point: the clock runs from the transfer, counts calendar days, and does not stop for weekends or for the paperwork still on your lawyer's desk.
The transfer date is usually the date the shares are issued or purchased. It is not the date you signed an offer letter, and it is not your vesting start date if that is different. Put the 30th day in your calendar the day the board approves the issuance.
How do you file an 83(b) election?
The IRS introduced Form 15620 for the election, and founders can also use a written statement containing the required information. Whichever you use, the process is short:
- Confirm the transfer date, number of shares, price paid and fair market value with your company or counsel.
- Complete Form 15620 or the written statement with your details, the company's details, the property and the values.
- File it with the IRS within 30 days of the transfer, using a method that gives you proof of the date, such as certified mail with return receipt.
- Give a copy to the company that issued the shares.
- Keep your copy and the proof of filing permanently with your tax records.
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What happens if you miss the 83(b) deadline?
Generally the election is simply not available for that transfer, and the default rule applies: tax as shares vest. Some advisers describe restructuring options, such as a new grant with a new transfer date, but these have costs and need advice. The lesson for founders is to treat the 83(b) as part of company formation, on the same checklist as incorporation and the founders' agreement.
What should founders agree before shares are issued?
The 83(b) is the last step of a conversation founders should have first: who owns what, how shares vest, what happens if someone leaves, and who decides what. Agreeing those terms in writing before shares are issued avoids the most expensive kind of founder dispute.
| Decision | Common starting point | Why it matters |
|---|---|---|
| Equity split | Based on contribution, commitment and risk, written down with reasons | The most common source of founder conflict |
| Vesting | Four years with a one-year cliff is a widely used default | Protects the company if a founder leaves early |
| Leaver terms | What happens to unvested and vested shares on departure | Decided calmly now, not angrily later |
| Decision rights | Which decisions need all founders, which the CEO makes | Stops deadlock |
| IP assignment | All founders assign company-related IP to the company | Investors check this first |
| 83(b) plan | Who files, by when, and where proof is kept | The 30-day clock starts at issuance |
Agree the founder terms before the 30-day clock starts
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Questions people ask next
Does the 83(b) deadline ever get extended?
Not routinely. Treat 30 calendar days from the transfer as fixed.
Do I attach the 83(b) election to my tax return?
Not for property transferred on or after January 1, 2016. You still file it with the IRS within 30 days and give a copy to the company.
Does an 83(b) election apply to stock options?
Not to ordinary unexercised options. It can apply when options are exercised early into unvested shares, which starts a new 30-day clock from the exercise.
Can I file the 83(b) online?
The IRS introduced Form 15620 for the election. Check the IRS page for the current filing methods available to you.
Is this tax advice?
No. It explains the rule and process as of the date shown. Get advice from a tax professional before you file.