83(b) Election: Form 15620 and the 30-Day Deadline

When stock is transferred to you for services and is subject to a substantial risk of forfeiture, the default rule in Publication 525 is that you include its value in income only when it becomes substantially vested, minus whatever you paid. An 83(b) election lets you include the value at the time of transfer, minus what you paid, in income for the year of transfer instead. If you make it, the vesting rules no longer apply and, generally, later appreciation isn't compensation when the shares vest. Your basis for a later sale is the amount you paid plus the amount you included in income.

Treasury Regulation 1.83-2(a) adds a point founders often miss: paying full value doesn't disqualify you. The regulation says the fact that the transferee paid full value, realizing no bargain element, does not preclude the election. For founder stock bought at a price equal to its value, the amount included is zero.

The election applies to the stock, not to an option. Publication 525 says you can't make the choice for a stock option, and Rev. Proc. 2012-29 notes it can apply to unvested stock you receive when you exercise an option.

The person who performs the services makes it, whether an employee or an independent contractor, and not the company. Form 15620 has the taxpayer sign under penalties of perjury.

It matters when the stock is subject to forfeiture. Publication 525 says a substantial risk of forfeiture generally exists when rights in the property depend on future substantial services. Its example is stock you must sell back to the corporation at the price you paid if you leave within 3 years. Typical founder and early-employee stock that vests over time fits that description. If the shares are fully vested when transferred, there is nothing for the election to do.

Founders based outside the US should note that Form 15620 has fields for a foreign address and a country, and that Box 1 asks for a taxpayer identification number. If you don't yet have a US number, raise that with your preparer well before day 30. Whether the election helps depends on your tax residence and on how your home country treats the stock, which is a question for the credentialed preparer, not for a template.

File no later than 30 days after the date the property was transferred. Treasury Regulation 1.83-2(b) also allows the election to be filed before the transfer. If day 30 falls on a Saturday, Sunday or legal holiday, the Form 15620 instructions say the election is timely if postmarked by the next business day, under section 7503.

The clock starts on the transfer date, the date Box 3 asks for; Treasury Regulation 1.83-3(a) says what counts as a transfer. If the paperwork has several candidate dates, such as board approval, signing and payment, settle with your credentialed preparer the same week which one is the transfer.

The forms and regulation read for this page describe no extension of the 30 days. Treat the date as fixed.

Either works. The IRS says in the form that using Form 15620 is voluntary and that a written statement meeting Treasury Regulation 1.83-2 can be filed instead. Form 15620 collects the information in nine boxes.

The signed form also says the taxpayer will give a copy to the person for whom the services are performed and to the transferee if that is someone else. A written statement must be signed, say it is made under section 83(b), and cover the same ground: name, address and TIN, the property, the transfer date and tax year, the restrictions, the fair market value, the amount paid and a statement that copies were furnished. Rev. Proc. 2012-29 contains a sample statement.

Form 15620 says to mail the completed, signed form to the IRS office with which the person performing the services files a federal income tax return. Publication 525 (2025) adds the address: the one listed for your state under "Are requesting a refund or are not enclosing a check or money order" in Where Do You File? in the Form 1040 instructions. The sources read describe no fax number.

The IRS also lists Form 15620 (revised April 2025) among its mobile-friendly forms. It explains that mobile-friendly forms that need signatures require an IRS Online Account, and that after filling in the form you can submit it online or download a copy for mailing. The Form 15620 instructions still describe mailing, so confirm the current method on irs.gov before relying on online submission, and keep the proof the method gives you, such as a mailing receipt or an online confirmation.

Copies. Give a copy of the completed form to the person for whom you performed the services, which is the company, and to the transferee if that is someone other than you, such as a trust. A 2016 Treasury decision (T.D. 9779) removed the old requirement to file a copy with your income tax return, and revoked that part of Rev. Proc. 2012-29. The current regulation asks for one copy filed with the IRS office, and that rule applies to property transferred on or after January 1, 2016. The IRS reminds taxpayers to keep records that show the cost and tax treatment of the property.

There is no penalty for not electing; it's a choice. The cost sits in the tax. Without a valid election, each tranche is ordinary compensation when it vests, at its value on the vesting date.

A filed election is hard to undo. The regulation allows revocation only with the consent of the Commissioner, and consent is granted only where the person was under a mistake of fact about the underlying transaction and asks within 60 days of when the mistake first became known. A mistake about value, or a decline in value, is not a mistake of fact.

Forfeiture cuts the other way. If property with an election in effect is forfeited while unvested, no deduction is allowed for the amount included in income. The forfeiture is treated as a sale or exchange with a loss equal to the amount paid less the amount realized, a capital loss if the property is a capital asset. Put plainly, the election pays tax early on shares that may never vest.

If the 30 days have already passed, the sources read for this page describe no relief for a late 83(b) election. Take it to a credentialed preparer or an attorney, who can say whether anything is available.

Illustrative, with made-up figures. The mechanics follow Publication 525 and Rev. Proc. 2012-29. A founder buys 1,000,000 shares at $0.001 each, $1,000 in all, subject to vesting. Fair market value at transfer is also $0.001 a share.

Now suppose 250,000 of the shares vest later, when each is worth $2.00. Without the election, the income at vesting is 250,000 x ($2.00 less $0.001), or $499,750 of compensation in that year. With the election, nothing is added at vesting, and the basis in those 250,000 shares is the $250 paid for them.

If instead 600,000 shares were forfeited while unvested after an election, the loss is the amount paid for those shares, 600,000 x $0.001 or $600, less anything received for them. The election moves tax earlier; it doesn't remove it, and the value used in Box 6 has to be supportable.

Finbryn's role on an 83(b) election is preparation support, and the election is yours to sign and send. We assemble the inputs Form 15620 asks for from the stock purchase agreement and cap table: share counts, price paid, transfer date and the description of the restrictions. We work out Box 8 from the Box 6 and Box 7 figures you give us, put day 30 on the calendar the day the stock is issued, and keep a dated record: the completed form, the proof of how and when it was sent, and the copy given to the company. Finbryn does not set or opine on the fair market value in Box 6; that comes from the company's records or a valuation provider it hires.

Talk to a credentialed preparer before day 30 if the founder isn't a US taxpayer or is relocating, if unvested shares come from exercising an option early, if vesting depends on milestones, if the shares go to a trust or relative, or if the value at transfer is more than the price paid. The preparer, not Finbryn, advises on whether the election makes sense. The wider formation checklist is in our startup accounting guide, and the accounting for equity awards is covered under stock compensation.

These repeat from one founder grant to the next.

• Starting the clock from the wrong date. The 30 days run from the transfer, not from the first conversation about equity.
• Mailing on day 30 with no proof. Without a receipt or confirmation, a lost envelope is your problem.
• Forgetting the company's copy. The form says you will provide one.
• Treating an option as stock. The election doesn't apply to the option itself.
• Assuming a lower value later fixes it. A decline in value isn't a mistake of fact.
• Leaving it out of the records. The company's equity ledger should show which holders filed, and when.