83(b) election: file within 30 days, and record it
It taxes restricted stock when you receive it, not as it vests. File Form 15620 or a written statement no later than 30 days after the transfer, and copy the company. A late election cannot be fixed, and a founder paying fair market value usually reports $0 of income.
Updated · 5 min read · By the Accountable team
- Taxed on $400 value minus $400 paid
- Basis $400; holding period starts now
- Only valid within 30 days
- Without it, each block is taxed as it vests
- No way to sell the shares to pay
- Not fixed: grows with the share price
Illustrative: 4,000,000 shares bought for $400 at their $0.0001 fair market value, vesting monthly over four years and averaging $1.50 at vesting.
The short version
- The election is due no later than 30 days after the date the stock is transferred, and the IRS will not accept a late one.
- IRS Form 15620 (April 2025) is the IRS's own form for the election, and a written statement that meets the regulation still works.
- The income you report is the stock's fair market value at transfer minus what you paid, so a founder buying at fair market value reports $0.
- Without the election, you owe tax on the value of each block of shares as it vests, and a rising share price makes that bill grow.
- An election cannot be revoked without the IRS's consent, which is given only for a mistake of fact, and it does not work for stock options.
The election taxes stock when received, not when vested
When a company transfers stock that is subject to vesting, the stock is restricted property. Without an election you include its value in income when it becomes substantially vested, minus what you paid. With an election, the IRS says you include the excess of its value at transfer over the amount you paid in income for the year of transfer, and later appreciation is generally not compensation when it vests.
| No election | With an 83(b) election | |
|---|---|---|
| Taxed when | Each time shares vest | You receive the stock |
| Amount taxed | Value at vesting minus price paid | Value at transfer minus price paid |
| Type of income | Compensation | Compensation, usually $0 for a founder buying at fair market value |
| Holding period starts | When the shares vest | When the shares are transferred |
| If you forfeit unvested shares | Nothing was taxed | Loss is what you paid minus what you get back; no deduction for income you included |
Without it, a $400 purchase can become $6 million taxable
Take a founder who buys 4,000,000 shares for $400, at $0.0001 a share, vesting monthly over four years. With the election, income is the $400 value minus the $400 paid, so Box 8 of Form 15620 is $0 and basis is $400. Without it, 4,000,000 x $1.50 = $6,000,000, minus the $400 paid, is taxed as compensation across the vesting years. The shares cannot be sold, so the founder pays that tax from other money.
The trade is a bet on the company. If the founder leaves before vesting and forfeits shares, the tax paid at transfer on any value above the price paid is not refunded.
Count 30 days from transfer; the deadline is final
The election must be filed no later than 30 days after the date the property was transferred. It may also be filed before the transfer. The IRS applies the weekend rule: if day 30 falls on a Saturday, Sunday or legal holiday, the election is timely if postmarked by the next business day.
If stock is issued on Thursday, March 12, 2026, day 30 is Saturday, April 11, so the last postmark day is Monday, April 13. Do not plan around the extra weekend days. Treat the 30th day as the deadline and file in the first week.
- Mar202612ThuStock transferred: day 0
- Mar202619ThuBest: file this weekMail with proof, or file online.
- Apr202611SatDay 30, a Saturday
- Apr202613MonLast postmark dayAfter this, the election is invalid.
The example above. Day 30 falls on a weekend, so the next business day counts.
File Form 15620 by mail or online; copy the company
Step 1: Get the signed stock purchase agreement, with the transfer date, share count, price paid and vesting terms.
Step 2: Decide the fair market value per share at transfer, without regard to the vesting restriction. For founders at formation this is usually the price paid.
Step 3: Fill out Form 15620, boxes 1 to 8: your name, taxpayer ID and address; the property and quantity; the transfer date; the tax year; the restrictions; fair market value; amount paid; and the amount to include in income. Box 9, the company's details, is optional. Sign and date the form.
Step 4: File it. The form's instructions say to mail it to the IRS office where you file your income tax return. According to law firm summaries, the IRS has also accepted Form 15620 online since July 2025 through an ID.me-verified account, and the filed copy can be downloaded. Use one method only.
Step 5: Give a copy to the company, and to the stock's transferee if that is someone else.
Step 6: Keep the filed form and proof of mailing or the online confirmation with the company's records.
Mailing with proof of delivery costs a few dollars, and it is the only evidence that a filing made on day 29 was made on day 29.
The books record the grant, price, value and filing
The election creates records for the company as well as the founder. If the stock's value at transfer is higher than the price paid, that difference is compensation, which the company reports. Ask your CPA how to report and withhold for an employee.
- The stock issuance: date, share count, price paid and cash received, in equity.
- The fair market value at transfer, and how it was set.
- The vesting schedule and any repurchase right.
- A copy of each person's filed Form 15620 and its proof of filing or mailing, kept next to the month of the grant.
- Any compensation recorded at grant, plus the payroll reporting your CPA chooses for it.
No tax owed on the grant
| Account | Debit | Credit |
|---|---|---|
| Checking | $400.00 | |
| Common stock | $40.00 | |
| Additional paid-in capital | $360.00 | |
| Balanced | $400.00 | $400.00 |
Assumes $0.00001 par value, so 4,000,000 shares put $40 in Common stock and the rest in Additional paid-in capital. The founder paid fair market value, so no compensation is recorded.
Accountable lets you drop files anywhere and links each one to the transaction or month it proves, so the 83(b) copy and its proof of mailing can sit with the month the stock was issued.
The election cannot rescue options, RSUs or a late filing
- It does not apply to stock options. The IRS says you cannot make this choice for a statutory or nonstatutory stock option.
- Form 15620 cannot be used for the different section 83(i) election.
- A filed election is irrevocable except with the IRS's consent, which is given only for a mistake of fact about the underlying transaction.
- A late election is not valid. If the window has passed, ask a tax adviser about what remains.
Questions founders ask
What is the deadline for an 83(b) election?
No later than 30 days after the date the stock is transferred to you. If day 30 is a weekend or legal holiday, the election is timely if postmarked by the next business day.
Can I file an 83(b) election late?
No. A late election is not valid, so a founder who misses the 30 days is taxed as the shares vest.
How do I file an 83(b) election now that Form 15620 exists?
Complete Form 15620, sign it, and mail it to the IRS office where you file your return, or, according to law firm summaries, submit it online through an ID.me-verified IRS account. Give a copy to the company either way.
Do I owe tax when I file an 83(b) election?
You report the stock's fair market value at transfer minus what you paid. A founder who pays fair market value reports $0, so there is usually no tax at filing.
Does an 83(b) election work for stock options?
No. The IRS says the choice cannot be made for a statutory or nonstatutory stock option. It is for stock that is transferred subject to vesting.
Keep the grant, the value and the filing in one place
Drop the 83(b) copy and its proof of filing into Accountable and it links to the month the stock was issued, so your CPA finds it at tax time.
Start freeSources, checked September 30, 2026:
- IRS: Form 15620, Section 83(b) Election (April 2025), with instructions
- IRS: Publication 525, Restricted Property and Choosing to include in income for year of transfer
- Cornell Law School: 26 CFR 1.83-2, Election to include in gross income in year of transfer
- Goodwin: Online filing of Section 83(b) elections is here (July 2025)
- Mintz: New electronic filing option for Section 83(b) elections (July 29, 2025)