How to File an 83(b) Election: Deadline, Steps, and Risks

To file an 83(b) election, mail a signed IRS Form 15620 or an equivalent written statement to the IRS service center for your state within 30 days of the date your restricted stock was transferred to you, and give a copy to the company that issued the shares. The 30-day window is strict: no extensions, no grace period, and no relief for reasonable cause in the ordinary sense.¹

The 30-Day Deadline

The clock starts on the transfer date, not on your offer letter date or your vesting start date. In most cases the transfer date is the day your stock purchase agreement is executed and payment is made. Count 30 calendar days from that date. If day 30 lands on a Saturday, Sunday, or federal legal holiday, you have until the next business day.²

Miss the window and the election simply cannot be made. You fall back to the default rule under Section 83: ordinary income tax on the spread between what you paid and the fair market value on each vesting date, as each batch of shares vests.¹ The IRS has authority to grant relief for certain late elections, but for 83(b) purposes that relief is rare and generally requires showing that you took reasonable steps to file on time.

The election is also close to irrevocable once filed. The IRS will only allow you to revoke it if it was made based on a mistake of fact about the underlying transaction, and the revocation request must be filed within 60 days of discovering the mistake. A later drop in the stock’s value is not a mistake of fact, and neither is another party’s failure to do something you expected.³

What the Election Must Say

You can use IRS Form 15620 as a ready-made template, or draft a custom written statement. Either way the document must be signed and must contain the information required by Treasury regulations.²⁴ The required elements:

Your full legal name, current address, and Social Security number or ITIN.
A description of the property: number of shares, class of stock, and issuing company.
The exact date the property was transferred, and the taxable year for which you are making the election.
The nature of the restrictions creating the risk of forfeiture, such as “four-year vesting with a one-year cliff.”
The fair market value of the stock at transfer, calculated without regard to restrictions that will lapse. Your company usually supplies this figure from a recent 409A valuation.
The amount you paid for the stock. Enter zero if the shares were granted at no cost.
A statement that you have furnished copies to the required parties.

The difference between the fair market value at transfer and what you paid is the compensation income you will report on your tax return for that year. Form 15620 walks you through each field, which reduces the chance of leaving something out.

Where to Mail It

Send the signed election to the IRS service center where you would file a paper tax return. The address depends on your state of residence:²

Austin, TX 73301-0002 — Alabama, Arizona, Arkansas, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas.
Kansas City, MO 64999-0002 — Connecticut, Delaware, District of Columbia, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, and Wisconsin.
Ogden, UT 84201-0002 — Alaska, California, Colorado, Hawaii, Idaho, Kansas, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oregon, South Dakota, Utah, Washington, and Wyoming.

If you live in a foreign country, a U.S. territory, or use an APO or FPO address, mail the election to: Department of the Treasury, Internal Revenue Service, Austin, TX 73301-0215, USA.

Proving You Filed on Time

Because the deadline is unforgiving, you need solid proof of the mailing date. Send the envelope via USPS Certified Mail with Return Receipt Requested. The postmark serves as your legal filing date under the timely-mailing-treated-as-timely-filing rule.⁵ The post office gives you a stamped receipt with a tracking number, and once the IRS signs for delivery you receive the green return receipt card. Keep both. They are your primary defense if the IRS later questions whether you filed on time.

After You File

Mailing the election to the IRS is not the last step. You must also give a copy of the completed election to the company (or person) you performed the services for, so it can handle its own reporting and withholding tied to the compensation income.⁴ If the person performing the services and the person who received the property are different people, a copy must also go to the property recipient.

Attaching a copy to your annual tax return is no longer required for property transferred on or after January 1, 2016. Many tax professionals still recommend it as a clean paper trail, but the rule itself is gone.

Build a personal file that holds your signed copy of the election, the certified mail receipt, and the green return receipt card. When you eventually sell the stock, these documents establish that you already paid tax on the transfer-date value, which fixes your cost basis and prevents double taxation.

Before You File, Weigh the Downsides

Because the election is effectively locked in once made, think through what happens if things do not go as planned.

If You Leave Before Vesting

If you leave or are terminated before the shares fully vest, you forfeit the unvested shares. You do not get a refund of the tax you already paid on them. The Code specifically bars any deduction for income previously recognized under an 83(b) election on forfeited property.¹ Your only potential relief is a capital loss equal to the amount you actually paid for the forfeited shares, minus anything you received on forfeiture.⁶ If you paid little or nothing for the stock, that loss is small or zero.

If the Stock Drops

If the company’s value falls after you file, you will have paid tax on a higher figure than the stock is currently worth. There is no refund mechanism. In a worst case where the company fails entirely, you could end up having paid tax on stock that became worthless. Any later capital loss is limited to what you actually paid for the shares, not the income you recognized on the election.

Upfront Tax

The election accelerates your tax bill. For founders receiving shares at incorporation when the value is near zero, the amount is often trivial. For employees joining after significant funding rounds, the spread between fair market value and purchase price can produce a real tax hit well before any shares can be sold.

One eligibility boundary worth flagging: restricted stock units are not eligible for an 83(b) election, because no shares are actually transferred to you at the RSU grant. The election only works for restricted stock awards where you receive real shares up front subject to vesting.

1
Office of the Law Revision Counsel. 26 USC 83 – Property Transferred in Connection With Performance of Services
2
Internal Revenue Service. Form 15620 – Section 83(b) Election
3
Internal Revenue Service. Revenue Procedure 2006-31
4
GovInfo. 26 CFR 1.83-2 – Election to Include in Gross Income in Year of Transfer
5
Office of the Law Revision Counsel. 26 USC 7502 – Timely Mailing Treated as Timely Filing and Paying
6
eCFR. 26 CFR 1.83-2 – Election to Include in Gross Income in Year of Transfer