A 30-day window
File within 30 days of the date the shares are transferred to you. There is no extension and no late relief.
Key takeaways
Taxes the transfer date, not each vest
The election taxes the shares now, at today's value, instead of at each vesting date. Use Form 15620 or a written statement that meets Treasury Regulation 1.83-2, and give the company a copy.
When it pays
Elect when the value at transfer is low and expected to rise. Restricted stock units do not qualify.
If you received equity in the last few weeks, you are already inside the 30 days. Call first if you are close to day 30.
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The setup
Section 83 taxes each vest. The election taxes the transfer date.
Under Section 83, you are taxed as the shares vest, on the value at each vesting date, as ordinary compensation. For equity that rises in value, that default is expensive. Each batch of shares is taxed at a higher value than the last, and withholding is due each time, in cash, on stock you may not be able to sell.
An 83(b) election moves the tax to the transfer date. You pay tax on the difference between what you paid and what the shares are worth that day. For founder stock bought at formation, that difference is often zero or close to it. Everything after that is capital gain rather than compensation, and your holding period starts on the transfer date, so long-term capital gain rates and qualified small business stock treatment become available sooner.
01Default vs election
What changes when you file, and what stays the same
| Without an 83(b) election | With an 83(b) election | |
|---|---|---|
| When you are taxed | At each vesting date | On the transfer date |
| Value used | The value on each vesting date | The value on the transfer date |
| Income reported | Ordinary compensation at every vest | Ordinary compensation once, on the transfer date value |
| Holding period starts | At each vesting date | On the transfer date |
| Cash needed | Withholding at every vest | Tax on the transfer date value, once |
| If the shares are forfeited | No tax was paid on the unvested shares | The tax already paid is not refunded |
02The 30-day window
The 30-day deadline and the transfer date that starts it
The 30 days run from the date the shares are transferred to you. That is usually the day you own the shares, even though they can still be taken back. For founder stock it is the day the purchase closes, not the day the board approved it and not the day the certificate arrives. If day 30 falls on a weekend or a federal holiday, you get the next business day. Nothing else extends the deadline.
Worked example: shares are transferred on Monday 3 March. Day one is 4 March, which makes day 30 Wednesday 2 April. An election filed on 3 April is late. If day 30 fell on a Saturday, the deadline would move to the following Monday.
The 30-day window is the whole election
Measured from the transfer date, not from vesting and not from your filing deadline.
- Day 0
Shares transferred. The clock starts.
- Day 30
File Form 15620 or a conforming statement. Give the company a copy.
- Vesting dates
Nothing to report if the election was made.
- Sale
Gain is capital, not compensation.
Miss day 30 and the election is gone. There is no late-filing relief and the outcome cannot be reversed later.
If day 30 falls on a weekend or a federal holiday, the deadline moves to the next business day.
Courts have consistently declined to excuse late elections, and the IRS does not grant extensions. A missed election cannot be fixed on an amended return, and the tax treatment is permanent.
Revocation is narrower still. The IRS will consent to revoke an election only where it was made under a mistake of fact about the underlying transaction, and the request has to be made within 60 days of the day you first became aware of the mistake. A change of mind about the company is not a mistake of fact.
03Step by step
How to file an 83(b) election, step by step
Fix the transfer date and the value
Pull the stock purchase agreement, the board consent, and the payment record. Document the fair market value on that date and how you arrived at it, whether that is the purchase price at formation or a 409A valuation.Complete the election
Use Form 15620 or a written statement that meets Treasury Regulation 1.83-2. The form is optional and both are equally valid, but the form is harder to get wrong because it asks for every required item, including the company’s name, address and taxpayer identification number.File it with the IRS within 30 days
Submit it online through your IRS online account, which is the faster route and gives you an immediate receipt, or mail it to the office where you file your federal return. Use one method, not both.Give a signed copy to the company
This requirement did not go away with electronic filing, and the company needs it for its own payroll and cap table records.Keep proof of timely filing
Your electronic confirmation, or a certified mail receipt with the postmark if you mailed it.File the workpapers with your permanent records
The valuation support establishes your basis. Nobody will ask for it until you sell, which may be seven years later.
04When to elect
Strong and weak cases for an 83(b) election
An 83(b) election is worth making when the value at transfer is low and expected to rise. It is not worth making when the tax due at transfer is large, and it is not available on restricted stock units at all.
Strong case: founder stock at or near formation.The difference between what you pay and what the shares are worth is small, so the tax is small, and all the future growth is taxed as capital gain.
Strong case: an early exercise into unvested shares.You hold property that can be forfeited, so the election is available and the difference at exercise is usually small. If the shares came from an incentive stock option, that same difference is an alternative minimum tax item in the exercise year, so run both calculations before you file.
Weak case: a high value at transfer.You would owe real tax, in cash, on stock you cannot sell, in a company that may not exist in three years.
No case: restricted stock units.A restricted stock unit is a promise to deliver shares later, not property transferred now, so there is nothing to elect on. This is the misunderstanding we correct most often.
Also available: LLC units and partnership interests.An 83(b) election applies to any restricted property received for services, not only corporate stock. For a profits interest that meets the Revenue Procedure 93-27 safe harbor the value at grant is zero, and a protective election preserves the position if the safe harbor is later questioned.
The risk runs one way. If you make the election and the shares are later forfeited or become worthless, the tax you paid is not refunded. What you get instead is a capital loss, usable against capital gains and up to $3,000 of ordinary income a year. That risk is the deciding factor whenever the value at transfer is large.
Worked example: 1,000,000 shares of founder stock bought at formation for $0.0001 a share, so $100 paid for $100 of value. The same shares, taxed on two different schedules — 1,000,000 shares of founder stock bought at formation for $0.0001 a share, vesting over four years.
| Without an election | With an election | |
|---|---|---|
| At purchase 1,000,000 shares at $0.0001 | $0 | $0 |
| Year 1 vest 250,000 shares at $1.85 | $462,500 | $0 |
| Year 2 vest 250,000 shares at $2.40 | $600,000 | $0 |
| Year 3 vest 250,000 shares at $3.10 | $775,000 | $0 |
| Year 4 vest 250,000 shares at $4.00 | $1,000,000 | $0 |
| Total ordinary income | $2,837,500 | $0 |
| Cost basis at sale | $2,837,600 | $100 |
Share values after purchase are illustrative. Without the election the holding period also restarts at each vesting date, and every vest is an ordinary income event payable in cash, on stock you cannot sell.
05QSBS
The 83(b) election and the qualified small business stock holding period
Filing the election starts the Section 1202 holding period on the transfer date. Without it, the holding period starts again at each vesting date, so a four-year vesting schedule pushes the last batch of shares four years further out.
For stock issued after 4 July 2025 the exclusion is tiered: 50 percent of the gain at three years, 75 percent at four years and 100 percent at five years, with the unexcluded part taxed at 28 percent. The per-issuer cap is the greater of $15 million or 10 times your basis, and the company can hold up to $75 million of gross assets when the stock is issued. Stock issued on or before 4 July 2025 keeps the old rules, which require more than five years for any exclusion.
Starting the clock at transfer rather than at vesting is often worth more than the tax the election costs. That is the main reason founder stock is the standard case for filing.
50%
Excluded at 3 years
75%
Excluded at 4 years
100%
Excluded at 5 years
$15M / 10×
Per-issuer cap
06New York
How New York taxes restricted stock with and without the 83(b) election
New York taxes restricted stock by workday fraction, and the 83(b) election changes the period that fraction covers. Tax Law sections 631(g) and 638(c) require nonresidents and part-year residents who worked in New York during the grant period to allocate that compensation to New York.
With the election,the compensation is the value at transfer less what you paid, and the allocation period is the same one that applies to your ordinary pay in the year you received the shares.
Without the election,the allocation period runs from the date you received the shares to the earliest of vesting, the end of your services, or the sale, which can cover several years.
For a founder who files while working in New York, the election fixes New York exposure in the grant year, at a value that is usually near zero. Without it, the workday fraction keeps counting New York days, so someone who later moves out of the state can still owe New York tax on a much larger figure. The rules are set out in TSB-M-95(3)I and 20 NYCRR 132.24, and the federal election governs the New York measurement date.
07How we help
83(b) election support from a New York CPA firm
We handle 83(b) elections from the deadline check through the year you sell the shares.
Deadline triage.Where you are in the 30 days, and what can still be done today.
Election preparation.Form 15620 completed, reviewed, and filed, with the copy to the company handled.
Valuation support.Documenting the transfer date value so the basis holds up years later at sale.
Downstream planning.Holding period, qualified small business stock eligibility, and the alternative minimum tax exposure that comes with incentive stock options.
Return preparation.Reporting the election year correctly, and the sale year correctly. Missing documentation costs the most in the sale year.
If the company is also your business, the same meeting covers the entity and compensation questions we handle in the business return, and the deferred tax consequences appear in the deferred tax asset work on your financial statements.
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From the record
On planning and on the follow-through
“Especially if you're earning equity from your employer and you have stock options you exercise, make sure to plan how much alternative minimum tax you're paying, because there's ways to reduce that strategically.”
George Dimov, CPA
“I also needed the 83b election for my other DE startup. His senior accountant Talai was also very responsive. Literally one day turnaround and was all done on Dropbox and email/text without having to leave my home office.”
Najwa Ghani
Google review
The problem we fix most often: a founder filed the election on time, kept no proof, and kept no record of how the transfer date value was set. Five years later the company sells and the buyer’s diligence team asks for the election. The position may well be correct, but without support it gets discounted in the deal. Filing takes an afternoon. Without the supporting file, the position is hard to defend when it matters most.
08FAQ
Common questions about the 83(b) election
Can I file an 83(b) election late?
No. The 30-day deadline has no extension and no late-filing relief, and courts have consistently declined to excuse late elections. If the deadline has passed, the remaining options are on the company side, such as a new grant, and they need to be looked at quickly.
Do restricted stock units qualify for an 83(b) election?
No. A restricted stock unit is a promise to deliver shares in the future, and Section 83 applies only to property that has already been transferred. You can only elect on restricted stock, on early-exercised shares, or on other property such as LLC units.
Do I still attach a copy of the election to my tax return?
No. For property transferred from 1 January 2016 onward the IRS removed that requirement. What matters is filing with the IRS within 30 days and giving a copy to the company. Attaching a copy to the return is optional and does not affect validity.
Is Form 15620 required, or can I write my own statement?
Either works. Form 15620 is optional, and a written statement that meets Treasury Regulation 1.83-2 is equally valid. The form is harder to get wrong because it prompts for every required item.
Can an 83(b) election be revoked?
Only with IRS consent, and only where the election was made under a mistake of fact about the underlying transaction. The request has to be made within 60 days of the day you first became aware of the mistake. Deciding the election was a bad idea is not a mistake of fact.
Does New York require its own 83(b) election?
The federal election governs the New York treatment. What changes for New York is the measurement period used to allocate the compensation, which matters most if you worked in New York during the grant period and later moved.
09Related
Related questions
Book a consultation
Book a consultation
Bring the stock purchase agreement, the board consent, and the date the shares were issued. That is enough to answer whether the election is still open and whether it is worth making.
Reviewed by George Dimov, CPA, New York, NY. Serving clients in all 50 states, 15+ years advising on equity compensation and founder stock planning. President of George Dimov, CPA, a New York City firm serving clients across the five boroughs and nationwide.