How to File a Section 83(b) Election: Deadline, Contents, and Risks

To file a Section 83(b) election, send a signed election statement to the IRS service center where you file your federal income tax return within 30 days of the date the property was transferred to you, and give a copy to the company that granted the equity. You can use IRS Form 15620, released as a standardized option, or a self-drafted written statement that meets the requirements of Treasury Regulation 1.83-2. Mail is currently the only accepted method.¹

The 30-Day Deadline Is Absolute

The election must reach the IRS within 30 days of the transfer date. No extensions. No late-filing relief. No administrative process exists that can rescue a missed election. If the 30th day falls on a Saturday, Sunday, or legal holiday, the deadline moves to the next business day, and that is the only flexibility built into the rule.¹

Founders who incorporate a company, issue themselves restricted stock, and then focus on building the product routinely let those 30 days slip by. The cost of that oversight scales with how much the equity appreciates before it vests: without the election, every dollar of that appreciation is taxed as ordinary income rather than as capital gain when the shares are eventually sold.

What the Election Must Contain

Whether you use Form 15620 or write your own statement, the filing has to include each of the following items required by Treasury Regulation 1.83-2:²

Your full name, address, and taxpayer identification number (usually your Social Security Number).
A description of the property, including the number of shares and the name of the issuing company.
The date the property was transferred to you and the tax year for which you are making the election.
The nature of the restrictions creating the risk of forfeiture, such as the vesting schedule or repurchase rights.
The fair market value of the property at the time of transfer, determined without regard to restrictions that will lapse.
The amount you paid for the property, even if that amount is zero.
A statement confirming that you have provided copies of the election to the required parties.

Form 15620, released by the IRS as a standardized option, walks through each of these fields and reduces the chance of leaving something out. Its use is optional; a compliant written statement still works.³

You no longer have to attach a copy of the election to your annual income tax return. The IRS removed that requirement in 2016 when it amended Treasury Regulation 1.83-2(c). The filing with the IRS and the copy to your employer are still required; the return attachment is not.

Where and How to Send It

Mail the signed election to the IRS service center where you file your federal income tax return. The IRS does not accept 83(b) elections by e-file, fax, or email. Paper mail is the only accepted channel.¹

Use USPS Certified Mail with Return Receipt Requested. The postmark counts as your filing date under the timely-mailing-is-timely-filing rule, and the green return card confirms delivery. Keep both with your permanent tax records. USPS Priority Mail Express, which carries its own tracking and delivery confirmation, is another option some practitioners use.

Send a copy of the election to your employer or to whichever entity granted the equity. The employer needs it to handle income tax withholding and payroll tax reporting on the amount you recognized as income at grant.²

Whether You Can File at All

The election is available when you receive property in exchange for services and that property is subject to a substantial risk of forfeiture, meaning your ownership depends on meeting some future condition, almost always a vesting schedule tied to continued employment. Restricted stock awards are the classic case, and early-exercised stock options qualify when the company lets you buy shares before the vesting schedule is complete.⁴

Restricted stock units do not qualify. An RSU is a promise to deliver shares in the future rather than a present transfer of property, so nothing exists at grant on which to make the election.¹

Profits interests in LLCs and partnerships sit in an unusual position. Under IRS Revenue Procedure 93-27, a properly structured profits interest generally has zero value at grant, so no tax is due whether you file or not. Tax advisors commonly recommend filing a protective election anyway: if the interest later turns out not to meet the revenue procedure’s requirements (for example, because it is sold within two years), a timely election preserves favorable treatment that would otherwise be lost. Because the value at grant is typically zero, the election costs nothing and guards against the worst case.

What Filing Actually Does

Without the election, you owe ordinary income tax at each vesting event on the difference between what you paid and the fair market value of the shares that just vested. If the company’s stock has climbed during the vesting period, that tax bill grows with it.⁴

Filing the election moves the recognition point to grant. You pay ordinary income tax then, on the spread between fair market value and what you paid, and all future appreciation moves outside the ordinary income system. When you eventually sell, provided you have held the shares for more than one year after transfer, the growth is taxed at long-term capital gains rates. Your basis becomes what you paid plus the ordinary income you recognized, which reduces the gain at sale.⁵

An early-stage founder who receives 100,000 shares at $0.01 per share recognizes $1,000 of ordinary income at grant (less anything paid). If those shares are worth $10 each when the last tranche vests four years later, nothing more is owed at vesting, and the eventual sale is taxed as long-term capital gain. Without the election, that same founder would recognize roughly $1 million of ordinary income across the vesting schedule.

The holding period for long-term treatment starts on the transfer date, not on any later vesting date, which is a separate benefit of filing.

What You Are Risking

The election is irrevocable without IRS consent, which is almost never granted. If you pay tax at grant and later leave before the shares vest, you forfeit the unvested shares, and the tax you paid on them is gone.⁴

The statute is explicit: if property covered by an 83(b) election is later forfeited, no deduction is allowed for the forfeiture. You cannot claim a refund of the tax paid at grant, and you cannot deduct the income you previously reported. Any loss deduction is limited to what you actually paid out of pocket for the shares (less anything returned to you on forfeiture), and it is treated as a capital loss. If you received the shares for free, that deduction is zero.⁵

This is why the election lines up best when the current fair market value is very low, such as founder stock worth fractions of a cent. When the value at grant is already meaningful, you are prepaying tax on income you might have to give back, and the math often tilts the other way.

A Note on ISOs and AMT

Incentive stock options interact with the election on a separate track. When you early-exercise ISOs on stock that remains subject to vesting, the spread between exercise price and fair market value can trigger alternative minimum tax. The IRS has indicated in the instructions for Form 6251 that an 83(b) election may be made for AMT purposes on ISO stock that is not yet transferable and remains subject to a substantial risk of forfeiture. Filing accelerates the AMT income to the grant date and prevents additional AMT recognition when the stock later vests. The interaction between the regular tax system and the AMT calculation is complicated enough that professional tax advice is worth the cost before you file.

1
Internal Revenue Service. Form 15620 – Section 83(b) Election
2
eCFR. 26 CFR 1.83-2 – Election to Include in Gross Income in Year of Transfer
3
Internal Revenue Service. Update to the 2024 Publication 525 for Section 83(b) Election
4
Office of the Law Revision Counsel. 26 USC 83 – Property Transferred in Connection With Performance of Services
5
Office of the Law Revision Counsel. 26 US Code 83 – Property Transferred in Connection With Performance of Services