Equity · 83(b)
30 days. Don't lose the window.
When substantially nonvested stock is transferred for services, an 83(b) election may change when the recipient recognizes compensation income. The filing deadline is federal and short, so the decision belongs inside the stock-issuance workflow.
Federal tax election. The decision can have significant tax consequences and depends on the actual property, purchase price, vesting and transfer facts.
Direct answer
An 83(b) election accelerates the tax timing on substantially nonvested property.
If the election is available and made, the service provider generally includes the excess of fair market value over the amount paid at the transfer date instead of waiting for the property to become substantially vested. The IRS now provides Form 15620, and the election still must be filed no later than 30 days after transfer.
Deadline proof
The trigger is the property transfer—not when someone remembers the form.
- Restricted founder stock transfer date: September 1Source date
- Federal filing deadline: 30 days after transferDeadline
- IRS filing copy + company copy still need completionNext
The federal election window runs from the property-transfer date. Treat the filing and evidence as part of the issuance record, not a reminder floating in someone’s inbox.
Workflow
Connect the tax election to the issuance that created it.
What to check
Do not file one just because the startup gave someone equity.
- Was property actually transferred?
- Is the property substantially nonvested?
- Transfer date
- Fair market value and amount paid
- Restrictions / vesting terms
- Taxpayer, service recipient and filing-copy details
Founder questions
The deadline is simple. The decision is not.
What does an 83(b) election do?
When substantially nonvested property is transferred in connection with services, §83(b) allows the service provider to elect to include the spread between fair market value and the amount paid in income at transfer rather than waiting until the property later vests. The economics and tax consequences depend on the actual property and price.
How long do I have to file an 83(b) election?
The IRS instructions for Form 15620 state that an 83(b) election must be filed no later than 30 days after the property is transferred, subject to the weekend/legal-holiday rule in IRC §7503.
Is there now an IRS form for 83(b) elections?
Yes. The IRS provides Form 15620, Section 83(b) Election. The IRS instructions also allow a written statement that satisfies Treasury Regulation §1.83-2.
Can I file an 83(b) election for a stock option itself?
No. IRS Publication 525 states that the election cannot be made for a statutory or nonstatutory stock option. If an option is early exercised and stock is transferred subject to vesting, the stock transfer raises a separate §83(b) analysis.
Can I revoke an 83(b) election later?
Generally not without IRS consent. That is one reason the founder should understand the actual stock terms and tax tradeoff before filing rather than treating the election as automatic paperwork.