When to File an 83(b) Election
The 30-day window for 83(b) elections on founder and early employee stock—when to file, how to mail it, and what goes wrong if you wait.
An 83(b) election is a one-page letter you send the IRS saying you want to be taxed on restricted stock at grant instead of when it vests. For founders buying stock at par value ($0.0001/share is common), that often means near-zero tax now versus potentially huge tax later when the company is worth real money.
The catch is brutal: you have 30 days from the date the stock is transferred to you. Not 30 business days. Not "when your lawyer gets around to it." Thirty calendar days, and the IRS doesn't grant extensions for late elections.
If you're receiving founder shares subject to vesting, treat the 83(b) deadline like a product launch—non-negotiable. This is general information, not legal or tax advice.
Who should file
Founders purchasing restricted stock with vesting schedules almost always file if the purchase price is low and they expect value to rise. Early employees receiving restricted stock grants (not ISO options) may also file.
ISO and NSO option holders don't file 83(b) on the options themselves—they may have other tax events at exercise. RSUs typically aren't eligible for 83(b) because they're taxed at vest by default.
The 30-day timeline
Day zero is the date stock is transferred to you (often the incorporation date or grant date on your stock purchase agreement). Your election must be postmarked within 30 days after that date.
Counsel usually prepares the election form. You sign, mail via tracked USPS to the IRS service center where you file personal returns, and send a copy to your company. Keep certified mail receipt and a copy stamped by the company secretary.
What you owe at filing
You'll report the spread (fair market value minus what you paid) as income in the year of grant if FMV exceeds purchase price. For fresh incorporations, FMV is often par value—minimal income.
If you leave before vesting, you don't get a refund of tax paid on unvested shares you forfeit—that's the downside bet you make when filing 83(b).
Coordination with 409A and QSBS
Your 409A valuation supports FMV at grant. If FMV is wrong and too low, the IRS may recharacterize income later. If too high, you overpay tax now.
Founder stock with a proper 83(b) at low basis can support QSBS later—another reason to get paperwork right at formation.
Checklist before you mail
Confirm vesting schedule matches SPA language. Confirm number of shares and purchase price. Use the IRS address for your personal filing location. Mail copies to company and keep one in your personal vault (Dropbox doesn't count as "proof" without the mailing receipt).
Set a calendar reminder at day 20—not day 29.
Key takeaways
- File within 30 calendar days of stock transfer—no extensions available.
- Founders with cheap restricted stock usually file to avoid tax on future appreciation at vest.
- Mail via USPS with tracking; keep copies for you, the company, and proof of filing.
- 409A at grant affects current income; 83(b) also supports long-term QSBS planning.
This guide is for general education only and is not tax, legal, or accounting advice. Rules change, and your facts matter. Talk to a qualified professional before filing or making equity decisions.
Related guides
83(b) Election Deadline Missed: What to Do
Missed the 83(b) 30-day window? Options are limited—here's what founders actually do next and how to avoid compounding the mistake.
QSBS Exclusion Explained for Founders
Section 1202 QSBS basics: which founder shares may qualify for federal capital gains exclusion and the holding-period rules.
CPA for Startup Founders: How to Choose the Right One
A practical checklist for picking a CPA who understands founder equity, fundraising, and the tax quirks of early-stage companies.