The short version
If you receive company stock that vests over time (common for founders and early employees), you are normally taxed as it vests, on whatever the stock is worth at each vesting date. As the company grows, that can mean a rising stream of ordinary income.
An 83(b) election lets you choose to be taxed up front instead, on today's usually low value. For the right person with low-value stock, that can mean little or no tax now and capital-gains treatment on the growth later. You generally have to file it within 30 days of receiving the stock, and there is generally no relief for missing it.
The problem it solves
When you get restricted stock that vests over time, the default rule taxes you at each vesting date on the value then. If the company is growing, each vesting slice can be worth more than the last, so you can owe ordinary income tax year after year on stock you cannot necessarily sell yet.
That is the trap the 83(b) election is designed to let you step around.
What the election actually does
Filing an 83(b) election tells the IRS: tax me now on the full value of this stock, as if it were already vested. If the stock is worth very little today, that up-front tax can be small or even zero.
- You recognize the value now, at today's low number, instead of at each future vesting date.
- Your capital-gains holding clock starts now, which can help you reach long-term rates sooner.
- Future appreciation is generally taxed as capital gain when you sell, not as ordinary income as it vests.
For a founder whose stock is worth almost nothing at formation, that combination can be powerful: pay little or nothing today, and convert years of growth into capital gain rather than ordinary income.
The 30-day deadline
The election generally must be filed within 30 days of when the stock is transferred to you (for early-exercised options, the date you exercise). This is the part that catches people. The window is short, it starts immediately, and there is generally no extension and no relief for missing it.
File within roughly 30 days of receiving the stock, keep proof that you filed on time, and give a copy to your company. Miss the window and the opportunity is usually gone for good. (If day 30 lands on a weekend or holiday, it rolls to the next business day, but treat the deadline as firm.)
Because the consequences of missing it are permanent, treat the 30-day clock as the single most important fact on this page.
How you actually file it
The mechanics got easier recently. In late 2024 the IRS released an official standardized form for the election, Form 15620, and in mid-2025 it began allowing that form to be filed online. You now have a few paths:
- File Form 15620 online through the IRS website (you sign in with an IRS account via ID.me, and you get a confirmation you can save). The IRS treats online submission as the preferred method.
- Or mail a completed Form 15620 (or a custom election letter with the required details) to the IRS office where you file your return, ideally by certified mail so you have dated proof.
A few things have not changed: the 30-day deadline is firm, you must give a copy to your company, and you should keep a copy for your records. You file using one method only, not both. One nice side effect of online filing is that it removes the old late-night sprint to the post office on day 30.
Who it helps, and who it can hurt
It tends to help people receiving restricted stock when the value is low: founders at formation, and employees who early-exercise unvested options when the spread is small. The lower the current value, the cheaper the election and the bigger the potential upside.
It can backfire when the stock is already valuable (the up-front tax may be large), or when there is real risk you will not keep the shares. If you forfeit unvested stock or the company fails, you generally do not get back the tax you paid by electing. The election is a bet that the stock is worth keeping and likely to grow, so it deserves a clear-eyed look at your specific facts.
Where this trips people up
Missing the 30-day window
The biggest one, and usually unfixable. The clock starts when you receive the stock, not when you get around to it. If an election makes sense, it has to be filed right away.
Filing but keeping no proof
If you cannot show you filed on time, you may as well not have. Keep dated proof of mailing and a copy of what you sent.
Electing when the value is already high
An 83(b) on high-value stock can create a large tax bill today on shares you cannot sell. The election shines when the current value is low, not high.
Assuming it applies to RSUs
Ordinary RSUs generally cannot use an 83(b) election, because you do not receive the stock at grant. The tool is for restricted stock and certain early-exercised options.
Forgetting to report it correctly
An election has reporting consequences for that year's return. Filing the election is step one; making sure your return reflects it is step two.
83(b) election questions people ask
What does an 83(b) election do?
It lets you choose to be taxed on the value of restricted stock now, at grant, instead of as it vests. When the current value is low and you expect it to rise, that can shift future appreciation into capital gain and start your holding clock early.
What is the deadline?
30 days from the date the stock is transferred to you. It is firm, with no extensions, which makes it one of the most time-sensitive elections in equity compensation.
How do I file an 83(b) now?
The IRS released Form 15620 for this in late 2024, and electronic filing became available in 2025. You can mail a signed election or file it electronically, send a copy to your company, and you no longer attach it to your tax return.
Who should consider making one?
People receiving restricted stock subject to vesting, or those early-exercising options, when the value at grant is low. The lower the current value, the smaller the tax cost of electing.
What happens if I miss the 30 days?
You generally cannot make the election late. You would instead be taxed as the stock vests, potentially at much higher values, which is the outcome the election is meant to avoid.
What is the risk of making an 83(b)?
You pay tax up front on value you do not yet fully own. If the shares never vest or the value falls, that tax is generally not refundable. The election is essentially a bet that the stock will be worth more later.
Keep reading
ISOs and AMT
Early-exercising options often goes hand in hand with an 83(b). Here is how ISOs and AMT work. →
QSBS
An 83(b) can start a holding clock that also matters for the QSBS exclusion. →
NSOs vs ISOs
Which option type you hold shapes whether and how early exercise makes sense. →
All resources
Browse every equity-comp explainer in one place. →
Holding restricted stock with a clock ticking?
The 83(b) decision is time-sensitive and hard to undo, which is exactly why it is worth a quick, careful look before the window closes. If you have just received restricted stock or early-exercised options, I am happy to help you weigh it. Here is how to start a conversation.
Become a ClientThis article is general information, not tax or legal advice for your specific situation. Tax outcomes depend on your individual facts, and the rules change over time. Talk to a qualified professional (I am happy to be that person) before acting on anything here. Reading this page does not create a client relationship.