You just incorporated, issued yourself founder stock with four-year vesting, and moved on to building. Somewhere in the incorporation packet was a page about an "83(b) election" with a 30-day deadline. If you file it, you probably owe the IRS almost nothing. If you miss it, you may have signed up to pay tax on your own company's growth, every vesting date, for four years. There are no extensions and no second chances. Here is how the 83(b) election works, and how the IRS's new online filing makes it easier to get right.
The default rule taxes you as you vest
Restricted stock — stock that the company can repurchase if you leave before it vests — is not taxed when you get it. Under the default rule, you are taxed as it vests: on each vesting date, the spread between the stock's fair market value and what you paid for it is ordinary income.
For a startup that works, that default is brutal. You buy founder shares for a fraction of a cent each at incorporation. Eighteen months later you raise a priced round and the stock is worth real money — and every monthly vest after that is a taxable event at the new, higher value. You owe income tax on paper gains, in cash, on stock you cannot sell.
What the default (no election) looks like
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At grant: No tax — but no clock starts either.
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Each vesting date: Ordinary income on the spread between FMV and what you paid.
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The problem: The better your company does, the bigger the recurring tax bill.
Your startup succeeds. Your tax bill vests along with it.
The 83(b) election moves the tax to day one
Filing an 83(b) election tells the IRS: tax me now, on all of it, as if fully vested. Your income is the spread between fair market value and what you paid — measured at grant, not at each vest.
For founders who buy their stock at fair market value at incorporation, that spread is zero or nearly zero. You pay effectively nothing now, nothing as you vest, and your capital gains holding period starts immediately — which also starts the clock that matters for Qualified Small Business Stock treatment down the road. When you eventually sell, growth is capital gain, not ordinary income.
The trade-off: if you leave and forfeit unvested shares, or the company fails, the IRS does not refund the tax you paid up front. That is why the election is close to a no-brainer for founders paying par value at formation — there is almost nothing to lose — and a real math exercise for anyone granted already-valuable stock.
Who should be thinking about this
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Founders with vesting stock: The classic case. File within 30 days of your stock purchase.
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Early hires buying restricted stock: Same analysis, same deadline.
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Early-exercised options: Exercising unvested options creates restricted stock — an 83(b) filing is what makes early exercise worth doing.
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Not needed: Standard options you haven't exercised, or fully vested stock. There is nothing to elect.
Pay a little tax now. Or a lot, on repeat, later.
Thirty days. No extensions. No do-overs
The deadline is 30 days from the date the stock is transferred to you — the purchase date, not the date your lawyer emails you the paperwork, and not the date you remember. If day 30 lands on a weekend or legal holiday, you get until the next business day. That is the entire universe of flexibility. The IRS does not accept late 83(b) elections, and no relief procedure exists for founders who simply missed it.
Missing the window doesn't just cost money. A missing 83(b) filing is a standard diligence question in every financing, and cleaning up the aftermath — recurring tax on each vest, valuations to measure each spread — is expensive and permanent.
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30 days: From the stock transfer date. Most startup lawyers tell founders to file within the first week.
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$0: What the election typically costs a founder who pays fair market value at incorporation.
The deadline doesn't care that you were busy incorporating. File it the same week you sign.
Form 15620 finally made filing electronic
For decades, filing an 83(b) election meant mailing a self-drafted letter to the IRS and hoping the postmark saved you. That era is over. The IRS released Form 15620, a standardized 83(b) election form, in late 2024 — and since July 2025 you can complete and submit it online through the IRS website, from a computer or a phone, with confirmation of receipt when you submit.
The form asks for what the election always required: your name, address, and taxpayer ID; a description of the property (for example, 800,000 shares of common stock) and the transfer date; the company's name, address, and EIN; the restrictions on the stock; the fair market value at transfer; what you paid; and the resulting income amount.
Two obligations survive the move online. You must still give a copy of the filed election to your company, and you should keep a copy permanently — investors' counsel will ask for it in every future financing.
The clean filing checklist
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File Form 15620 online (or by mail) within 30 days of the stock transfer
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Save the confirmation and a copy of the completed form — permanently
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Deliver a copy to the company for its records
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Calendar it before you sign the stock purchase agreement, not after
One page, once, on time. That's the whole job.
Cheap insurance is only cheap before the deadline
The 83(b) election is the highest-leverage piece of paperwork in a startup's first month: near-zero cost if filed on time, potentially six figures of avoidable tax if it isn't. The failure mode is never complexity — it is that nobody owned the deadline while everything else about starting a company was on fire.
That is exactly the kind of thing the OneGC platform exists to catch. Founder stock purchases inside the OneGC app come with the 83(b) analysis, the filing deadline tracked, and the signed copies stored where diligence will look for them — covered by flat monthly pricing instead of an hourly meter. Incorporate fast. Just don't let day 31 arrive first.
Sources
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IRS, Form 15620, Section 83(b) Election. The official standardized election form: required taxpayer, company, property, FMV, and amount-paid fields, and the 30-day filing requirement.
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Goodwin, Online Filing of Section 83(b) Elections Is Here (July 2025). Confirms the IRS now accepts Form 15620 electronically, the mechanics of online submission, and the surviving requirements to notify the company and retain copies.
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Mintz, New Electronic Filing Option for Section 83(b) Elections (July 2025). Details the 30-day deadline (with the weekend/holiday rollover rule), the no-late-filing rule, and what the election covers.