Formation and founders

The 83(b) Election: Deadline, How to File (Including Online) and What If You Miss It

By BlackBox Startup LawLast reviewed: October 20267 min read

What the election does

Section 83 of the Internal Revenue Code taxes property received in connection with services. When the property is subject to a "substantial risk of forfeiture" (such as founder vesting), the default rule is to tax it when the risk lapses, that is, at each vesting date, on the difference between the value at that date and the price paid. The 83(b) election reverses the default: you are taxed at the time of transfer on the difference between the value then and the price paid.

For a founder who pays par value for stock that is worth par value on day one, that difference is zero. The election therefore costs nothing now and avoids ordinary income later.

Worked example: with and without the election

Who needs to file

• Founders who buy stock subject to vesting.
• Employees or advisors who receive restricted stock (not options) subject to vesting.
• Option holders who early exercise unvested options. The 30 days run from the exercise date.
• Founders whose fully vested stock is later made subject to vesting (for example at a Series A). A protective election is common in that case.

You do not file an 83(b) for ordinary stock options at grant, for RSUs, or for fully vested stock with no restrictions.

How to file: three routes

1. Online through the IRS (US taxpayers)

Since July 2025 the IRS lets taxpayers submit an 83(b) election electronically through its website, using Form 15620 data fields and identity verification through an IRS account (ID.me). You receive a confirmation, which is the best proof of timely filing. Practitioners have reported limits on the online form: share numbers above 999,999 and per-share values with more than two decimal places may not fit, which is common for founders buying millions of shares at $0.00001. If your numbers do not fit, file on paper.

2. Paper filing by certified mail

1. Prepare the election (Form 15620 or a written statement containing the information required by Treas. Reg. 1.83-2(e): name, address, taxpayer identification number, description of the property, date of transfer, the restrictions, fair market value, amount paid, and the amount included in income).
2. Sign and date it.
3. Mail it to the IRS service center where you file your individual return, using USPS certified mail with return receipt. Under the "timely mailing" rule, the postmark date counts.
4. Include a second copy and a self-addressed stamped envelope asking the IRS to stamp and return it (useful but not guaranteed).
5. Keep the certified mail receipt with the stock purchase agreement.

3. Through your formation provider

Some formation platforms file the election for you. Confirm in writing what was filed, on which date, and keep a copy.

After filing

Give a copy to the company secretary (required), keep your own copy with proof of filing, and record the filing date in the cap table. Investors' counsel will ask for evidence in diligence.

Non-US founders

Non-US founders often ask whether they need an 83(b) at all. If you will never be a US taxpayer, US tax on your founder stock may never arise. But plans change (a move to the US, a green card, spending enough days in the US to become a resident), and investors routinely ask for proof that all founders filed. The common approach is to file a protective election on paper:

• If you have no SSN or ITIN, file without one and state that you are a non-US person who does not currently have a US taxpayer identification number. Some providers write that one has been "applied for" only when an ITIN application is actually pending.
• The online route requires US identity verification, so non-US founders generally mail.
• Keep the certified mail evidence; IRS acknowledgment letters may not arrive.

Check your home-country treatment too. In Mexico, for example, receiving shares below value in connection with services can be taxable income for a Mexican resident, independent of the US election. See non-US founders forming a Delaware C-Corp.

Counting the 30 days

Day one is the day after the shares are transferred (usually the date of the stock purchase agreement and payment). If the shares are issued on March 5, the deadline is April 4. If day 30 falls on a weekend or federal holiday, the general IRS rule for deadlines may extend it to the next business day, but do not plan around that: file in the first week. Startup Engine shows a countdown from the issuance date in your cap table.

What if you missed the deadline

There is no late election and no IRS relief procedure. Options to discuss with counsel include:

• Accept vesting-date taxation and plan for the tax on each vesting date.
• Remove the vesting restrictions so the shares are taxed now at current value (better if the value is still low), possibly with a new contractual arrangement that is not a substantial risk of forfeiture.
• Repurchase and reissue the shares at current fair market value with a new, timely 83(b).

Each fix has tax costs and must be documented carefully; the earlier you act, the cheaper it is.

Written and reviewed by BlackBox Startup Law, a cross-border startup and venture law firm (United States, Mexico, Latin America and Spain). Last reviewed: October 2026. This page is general information, not legal or tax advice for your situation.