Skip to main content
GoodwinNEXT

Enter your email to unlock downloads

You should consult with a lawyer before relying on these documents. The content in these templates are for informational purposes and do not constitute legal advice.

Templates

Section 83(b) Election

IRS Form 15620 linked within step-by-step filing instructions and bundled with a cover letter to the IRS Service Center. The 30-day filing window starts when the restricted stock or other property is transferred. File promptly and keep proof of timely filing.

ZIP88 KB

Updated 2026-07-09

You should consult with a lawyer before relying on this document. The content in this template is for informational purposes and does not constitute legal advice.

When you need this

Use this within 30 days after purchasing founder stock or other equity that is subject to vesting. A Section 83(b) election generally allows the purchaser to recognize income, if any, at the time the equity is transferred, based on the difference between the fair market value of the equity and the purchase price at that time, rather than as the equity vests over time. For day-one founder stock purchased at fair market value, that spread may be zero or very low, but the analysis depends on the facts. The download bundles IRS Form 15620 (the election form itself, April 2025 standardized version) with a cover letter to the IRS Service Center and a one-page filing instruction sheet.

  • Within thirty days of any purchase of stock subject to vesting — founder stock, restricted stock awards, early-exercised options.
  • Right after signing your Stock Purchase Agreement. The 30-day clock runs from the date the equity is transferred, not the signing date or the board approval date.
  • Before the 30-day deadline. The deadline is strict and cannot be extended, waived, or rescued. File early in case there are mailing delays.

Worked example

Scenario
A founder purchases 4 million shares of common stock at formation, subject to four-year vesting. The Stock Purchase Agreement is signed on a Friday. The following Monday, the founder mentions to their accountant that there may be “some tax forms to handle later.” The issue does not get addressed, and three months later the founder reads about Section 83(b) elections in a startup newsletter.
Outcome
By then, it is too late. The 30-day filing window has passed, and the election generally cannot be made retroactively. Without a timely Section 83(b) election, the founder may be taxed as the shares vest over time, based on the difference between the purchase price and the fair market value of the shares at each vesting date. If the company’s value increases significantly, the founder could face substantial ordinary income tax on shares that are vesting, even though the founder has not sold any shares or received cash to pay the tax. A timely 83(b) election filed within the 30-day window can help avoid that result when the stock is purchased at or near fair market value at formation.

Watch out for

  • Counting the thirty-day window from the wrong dateThe 30-day deadline runs from the date the property is transferred, not the formation date, board approval date, or the date the founder remembers to ask about tax forms. For founder stock, this is usually tied to the actual stock purchase/issuance date. The IRS instructions provide a limited next-business-day rule if the 30th day falls on a Saturday, Sunday, or legal holiday, but founders should not rely on last-day filing. File early and keep proof of timely filing.
  • Waiting until the deadline to file.Whether filing online or by mail, the 30-day window is strict. Online filing of Form 15620 is now available, and paper filing by mail remains available. Pick the method that fits the situation, follow the instructions carefully, and make sure the submission is completed or postmarked before the deadline.
  • Failing to keep proof of filing.Do not assume the IRS will send back a date-stamped copy. If filing online, download and save the confirmation and completed Form 15620. If filing by mail, use a method that provides reliable proof of mailing and delivery, and keep the receipt, tracking information, and a copy of the signed election with the founder’s records.
  • Forgetting to send a copy to the company.Send the company a copy of the signed Form 15620, proof of timely filing, and any IRS confirmation or stamped copy received, so the company can keep it with its equity records.

Related templates