What Is an 83(b) Election and Why Should You Care?

The 83(b) election is a tax form founders must file within 30 days of receiving restricted stock. It locks in a low tax basis and prevents huge tax bills later. Miss the deadline, and you could owe taxes on stock you don’t even control yet.

Why it Matters

If you're issued restricted stock and it vests over time, the IRS wants to tax you as that stock becomes yours. Filing an 83(b) election tells the IRS to tax you now, when the stock is (hopefully) worth very little — not later, when it might be worth a lot more.

This one form can save you tens or even hundreds of thousands of dollars.

Founders Checklist

File your 83(b) within 30 days of signing your stock grant
Send via certified mail or a digital IRS-authorized method
Include a self-addressed stamped envelope for a confirmation copy
Make a PDF copy for your own records and your lawyer
Alert your accountant, especially for multi-state or international founders

Founder Fails

Forgetting to file the form at all
Missing the 30-day window
Filing without confirmation or proof
Not telling your accountant you filed
Assuming options require 83(b) when they don’t

When to ask for Help

You’re not sure if your equity requires an 83(b) election
You’re working with international founders or issuing equity outside the U.S.
You want to combine early vesting with early tax filing
You’ve already missed the 30-day deadline and need damage control
You want to coordinate with your accountant or tax lawyer on tax strategy

Frequently Asked Questions

Q: What happens if I miss the 30-day deadline?
A: You’re stuck. You’ll be taxed as your stock vests — possibly at much higher valuations. The IRS almost never grants exceptions.

Q: What if I don’t think the stock is worth anything?
A: That’s exactly why you file. You want to be taxed when it’s worth nearly $0 so you don’t get hit with big bills later.

Q: Do I need to file if I’m getting options, not stock?
A: No. You only file 83(b) for restricted stock, not for standard stock options. (If you early exercise your options, then yes, file.)