What is an 83(b) Election and how do you file?

Filing an 83(b) Election can be one of the most important tax moves a startup founder or early employee can make, yet it’s often misunderstood, overlooked, or done too late. 

If you’re offering—or receiving—restricted stock as part of an equity compensation plan, understanding the 83(b) election is critical. This IRS filing lets you choose to pay taxes on the current value of your shares at the time of grant or purchase, rather than when they vest—potentially saving you a lot if your company grows in value. 

But should you file? That depends. Filing an 83(b) election can trigger upfront taxes, and it may not be the right move for every equity holder. This article goes through the process, timing, and common scenarios to help you make an informed decision. 

We’ll also show you how Fidelity Private Shares helps keep everything organized by streamlining your 83(b) election within the platform—no mailroom panic or filing cabinet digging required. 

What Is an 83(b) Election? 

An 83(b) election is a tax filing that allows anyone receiving restricted stock—whether purchased or granted—to pay income tax based on the stock’s fair market value (FMV) at the time of transfer, rather than when the shares vest. 

This election can be highly valuable for founders and early employees because: 

• You lock in today’s low valuation. If the company grows, you can avoid paying taxes later at a much higher value. 

• You start the capital gains holding period immediately. This accelerates eligibility for long‑term capital gains treatment. 

• You may start the QSBS five‑year clock earlier. For qualified stock, filing an 83(b) can help founders reach QSBS eligibility sooner. 
• You avoid tax at vesting. Without an 83(b), each vesting event becomes a taxable event based on the share value at that time.
   

However, it may not always be the right move. Filing an 83(b) means you’ll owe taxes now, which can feel expensive if the shares have meaningful FMV—or if the company doesn’t ultimately grow in value. That’s why founders and early employees should evaluate whether the upfront tax cost makes sense given their financial situation and the company’s trajectory. 

An 83(b) election is most commonly used by: 

• Founders receiving restricted stock awards (RSAs) 
• Employees who early‑exercise their stock options and receive restricted stock 

The Ironclad Deadline: The 30-Day Rule 

Why Is the 83(b) Deadline So Important? 

You must file your 83(b) election within 30 calendar days of the date the shares are issued or purchased, since that is when the IRS considers the transfer complete. 

Miss it, and the IRS will tax you on the shares as they vest at their future (and likely higher) value, which can lead to significant unexpected tax bills. 

The clock starts the day the company issues or transfers the shares to you – whether that happens through an RSA or through purchasing them via early exercise – not when you receive paperwork or talk to your lawyer. 

How to File an 83(b) Election  

Once you receive stock that is subject to vesting or forfeiture – whether the company issues it to you as an RSA or you purchase it through an early exercise of stock options – the IRS treats that transfer as complete. From that date, your 30-day window to file an 83(b) election begins. Here’s the exact process to follow if you’re filing. 

1. Gather Required Information 

Before completing the form, collect these details: 

• Name and address 
• Date of grant/purchase 
• Number of shares 
• Fair market value (FMV) at grant 
• Amount paid for the shares 
• Vesting schedule 

2. Prepare and Sign the Documents 

You’ll need to prepare: 

• A signed letter of election (some call it an 83(b) form) 

• A copy for your employer 

• A copy for your records 
  
  

Most founders use a pre-filled template provided by their legal counsel or equity platform. Be sure all details are accurate and signed correctly. 

3. Mail to the IRS (With Proof) 

To ensure timely filing: 

• Mail the signed 83(b) election to the IRS office where you file your personal tax return 

• Use Certified Mail with Return Receipt Requested—this provides the only accepted proof of timely filing 

• Also, send a copy to your employer for their records 

Fidelity Private Shares: Simplifying the 30-Day 83(b) Race 

While many founders and employees file their 83(b) manually, Fidelity Private Shares offers a streamlined workflow that helps you stay organized and on track with your deadlines. It keeps all your records in one place, simplifying document management and supporting compliance. 

Key features of the platform: 

• Auto-filled forms: The platform pre-populates your FMV, grant date, and share details directly from the cap table 

• Guided workflow: A built-in “Make 83(b) Election” task guides you through each step 

• Correct IRS address: Based on your location, the system tells you where to mail your forms 

• Secure records: The completed form is stored within the platform for future compliance, audits, or exits 

Fidelity Private Shares helps streamline the process and ensures all your 83(b) documents and deadlines are tracked in one place. You’ll still need to print and mail the form to the IRS—but with everything saved in-platform, staying compliant is easier and more efficient. 

See the Workflow in Action 

Want to stop worrying about IRS deadlines and tax mishaps? 

Schedule a free demo to see how Fidelity Private Shares automates the 83(b) process and other critical equity and legal tasks. It’s the simplest, safest way to stay compliant and audit-ready from day one. 

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