Guide
The 83(b) election, explained.
An 83(b) election changes when restricted founder stock is taxed: at transfer instead of as the restrictions lapse. You have exactly 30 days from that founder's stock purchase or transfer to file. There are no extensions.
Why it exists
Founder stock usually comes with vesting: the company can repurchase unvested shares if you leave. Under Internal Revenue Code §83, stock that can be forfeited may otherwise create taxable income as the restrictions lapse. If the company grows, each vesting date can create a tax bill on illiquid stock.
The 83(b) election moves that tax timing to the actual transfer date. That is why founders receiving restricted stock usually evaluate and file it immediately, preserve submission evidence, and ask a tax professional about any non-standard facts rather than waiting for vesting to begin.
The mechanics, briefly
Within 30 calendar days of the stock transfer, a signed IRS Form 15620 (or compliant written statement) must reach the appropriate IRS service center. Corply prepares the packet. You make the election decision during intake; your one disclosed pre-filing Founder Formation Authorization lets Corply complete and execute the election automatically once the RSPA establishes the transfer date. You then enter only your TIN securely, and Corply Ops mails, tracks, and preserves the evidence.
This is step eight of the Delaware C-Corp formation sequence; international founders should also see the EIN guide.
Do it from your agent
Corply starts the clock when stock is issued, executes the election under your one bundle authorization, and mails it through Ops. Your later action is only secure TIN entry.
FAQ
- When exactly does the 30-day clock start?
- On the date the stock is transferred to you (typically when you sign the stock purchase agreement and the shares are issued), not when you get around to the paperwork. The deadline is statutory; the IRS cannot extend it.
- Does Delaware acceptance start the 30-day clock?
- No. Delaware acceptance supplies the corporation's formation date and Corply's standard vesting commencement date. The separate 83(b) clock starts only when that founder's restricted stock is actually transferred or purchased.
- How does Corply handle filing?
- You decide during intake, then your one disclosed pre-filing Founder Formation Authorization lets Corply complete and execute the election automatically after the stock transfer. You later enter only your TIN in Corply’s secure browser; Ops mails, tracks, and stores the evidence.
- What happens if I miss the deadline?
- No do-overs. Each vesting tranche can create ordinary-income tax as its restrictions lapse, which can become painful if the company grows while the stock remains illiquid. If you've missed it, talk to a tax professional about your options.
- Should every founder file one?
- The election is the taxpayer's decision, not an automatic step. That's why no software may make it for you. For founders buying cheap stock subject to vesting, filing is the overwhelmingly common choice, but confirm your situation with a tax advisor.
This page is general education, not legal or tax advice, and reading it does not create an attorney–client relationship. Corply is operated by 0Lumen Labs Corp., is not a law firm, and routes questions that need individualized judgment to licensed professionals. Rules and fees change, so verify current requirements with the State of Delaware, the IRS, or your counsel.