The 83(b) 30-day rule
Thirty calendar days from the transfer of the shares. No extension, no late filing relief, no confirmation from the IRS. It is the shortest deadline in equity compensation and the one that costs the most to miss.
Updated November 4, 2026 Sources and methodology
What the election actually changes
Restricted stock is property subject to vesting. Without an election, section 83 taxes you at each vest date on the value of the shares vesting that day, as ordinary income. With an election, you are taxed once, at grant, on the difference between what you paid and the fair market value that day. Everything after that is capital gain, and the one-year holding clock starts at grant instead of at each vest.
For founder stock bought at $0.001 when the 409A price is $0.01, the income at grant is trivial and the election is almost free. For shares that already have real value, the election can cost thousands today to save more later, and the arithmetic has to be run rather than assumed. The 83(b) election calculator prices both paths with the same grant.
What a valid filing needs
There is no official form. The IRS requires a written statement, sent to the service centre where you file, that includes:
- Your name, address and taxpayer identification number.
- A description of the property and the number of shares.
- The date of the transfer and the tax year it falls in.
- The nature of the restrictions the property is subject to.
- The fair market value at transfer, and how it was determined.
- The amount you paid, if anything.
- A statement that you are making the election under section 83(b).
File by a method that proves the date, keep the receipt, and send a copy to your employer. Many companies now collect the election through their equity platform, but the filing to the IRS is still yours.
If you miss the window
Nothing explodes. You simply fall back to the default treatment: ordinary income at each vest date on the value that day, with the capital-gain clock starting there. For founder shares in a company that grows tenfold, that is the difference between long-term capital gain on the whole appreciation and ordinary income on most of it.
Run the numbers before assuming the election was a mistake. If the company fails, the election was worse than useless: you paid tax on shares that became worthless, and you cannot get it back. The election trades certainty for rate, so it belongs with companies you expect to survive and with grants you intend to keep.
Where it interacts with other rules
- Qualified small business stock. The 83(b) date can start the section 1202 holding period, which decides whether the gain is 50%, 75% or 100% excluded. See the QSBS calculator.
- Early exercise of options. Exercising unvested options and filing an 83(b) is the standard way to start the clock early, but it converts an ISO exercise into restricted stock, which changes the AMT calculation for the spread at exercise.
- Forfeiture. If you leave before the shares vest, the election cannot be reversed. The tax paid stays paid and the shares go back to the company.
A practical checklist
- Confirm the transfer date in writing, and count 30 calendar days from it.
- Get the 409A valuation in force on that date, not the previous round price.
- Decide before you sign anything that shortens the window.
- File, keep proof, and send the company a copy the same week.
- Record the election in your own tax file so the basis and holding period survive a decade of software changes.
Frequently asked
Do RSUs need an 83(b) election?
No. An RSU is a promise to deliver shares later, not a transfer of property, so there is nothing to elect on at grant. The 83(b) election applies to restricted stock you actually receive, and to options you exercise early while the shares are still unvested.
Does the 30-day clock start at grant or at board approval?
It starts on the date the property is transferred to you, which is normally the grant or purchase date on the agreement. If the board approves in March and you sign in April, the April date is the one that matters. Count calendar days and file early; there is no partial safe harbour.
What if the IRS loses my filing?
It is your burden to prove you filed. Send it by a method with tracking, keep the receipt, keep a copy of the signed election and the cover letter, and ask the company to keep one as well. The IRS does not acknowledge receipt and does not send a confirmation.
Can I undo an 83(b) election?
No. It is irrevocable, and there is no relief for a late filing. Under a 2021 procedure the IRS will accept certain elections filed after the deadline in narrow cases involving a retroactive change to the vesting terms, but that is not a general escape hatch and it requires the company to be part of the request.
Sources. Section 83(b) and the 30-day requirement: IRC section 83(b) and Treas. Reg. 1.83-2. Late election relief for retroactive vesting changes: IRS Revenue Procedure 2021-41. Section 1202 tiers: 26 U.S.C. 1202 as amended by Pub. L. 119-21.