83(b) Election
§83(b) lets you swap ordinary income at each vest for LTCG at exit — if you file inside 30 days. Miss the postmark and the option's gone. Here's the calculator, the deadline math, and the sample form.
Free, no signup, runs in your browser · IRC §83(b), Rev. Proc. 2012-29 sample form, §1202 QSBS interactions covered inline
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Punch in your grant. The tool shows tax paid and net dollars at exit for two paths: file the 83(b) inside the 30-day window, or don't file and pick up ordinary income every vest.
You save by filing 83(b)
$164,993
That's extra net-after-tax dollars in your pocket at exit if you file the 83(b) inside the 30-day window.
With 83(b) filed
$11,429,924
net after tax at exit
No election
$11,264,930
net after tax at exit
30-day filing deadline. No extensions. The election is due to the IRS service center where you file your 1040, postmarked within 30 days of the grant date. Rev. Proc. 2012-29 has a sample form. Send it certified mail, return receipt. Keep the green card forever.
The election is due to the IRS service center where you file your 1040, postmarked within 30 days of the grant date. Miss it by a day and you're locked into ordinary-income tax at every vest. There's no late-filing relief, no reasonable-cause waiver, no fix. It's one of the tightest hard deadlines in the entire tax code.
§83 says restricted property triggers ordinary income when it vests — that's the default. §83(b) is the opt-out: pay tax now on the spread between FMV and what you paid, and everything above that becomes long-term capital gain when you sell. For a founder who paid par and whose stock is worth par, the current tax is zero and every future dollar is LTCG.
There's a wrinkle. If you file and the company later goes to zero, you've paid tax on income that vanished — and §83(b)(2) explicitly denies a deduction for the forfeiture. For a founder with a $50 grant-day spread that's noise. For a Series C hire with a $200k spread on stock that might not IPO, it's a real risk that deserves a spreadsheet.
§83 of the Internal Revenue Code covers property transferred in connection with services. The default rule is simple: when the property vests, you owe ordinary income tax on whatever it's worth minus whatever you paid. Vesting spread out over four years means four years of ordinary income, each slice taxed at that year's FMV.
§83(b) is the sub-clause that flips it. You can elect, within 30 days of receiving the stock, to be taxed today on the entire spread — as if it had vested immediately. The spread is (FMV at grant) minus (price paid). If those two numbers are equal, you owe zero. And here's the payoff: every dollar of future appreciation gets taxed as long-term capital gain when you eventually sell, not as ordinary income at each vest.
For a founder buying 8 million shares of a brand-new C-corp at $0.0001 per share when the 409A says the fair value is also $0.0001, the arithmetic runs like this:
Three big benefits, zero cost. That's why every startup lawyer stuffs an 83(b) template into the founder-stock package. Just make sure it actually gets mailed.
30 days. From the grant date. Full stop.
The IRS has said this so many times, and so consistently, that it's become the canonical example of a bright-line tax deadline. Rev. Rul. 66-144 established it. §83(b)(2) codified it. Multiple Tax Court cases have refused §9100 relief for late filings, most recently in Austin v. Commissioner, where the taxpayer's filing was three days late and the court held that "no extensions" means no extensions.
Day 1 is the day after the grant. If your grant is dated March 15, day 30 is April 14. The postmark must be on or before that day. Not the delivery date — the postmark. Which is why every practitioner will tell you to walk it to the post office and get a certified-mail slip with a hand-stamped date. If the IRS later loses the paper, the green return-receipt card is your evidence.
Weekends and federal holidays don't extend the window. There's a general rule in §7503 that pushes deadlines landing on a weekend or holiday to the next business day, but the IRS has consistently refused to apply it to 83(b) elections. Assume the 30-day count is calendar days and the postmark must land inside it, and you'll never have this fight.
Three archetypes:
You paid par, the 409A is par, the spread is zero. Filing costs you nothing today and converts every future dollar to LTCG. This is the case where 83(b) is a free lunch and missing it is a career-defining mistake — a founder who missed the window on 8M shares that later sold at $50 owes ordinary tax on roughly $400M of vested spread instead of LTCG. That's about $50M of extra tax on paper, all because a form didn't get mailed.
If the 409A is still close to what you paid, the spread is small and the arithmetic still leans toward filing. Early Uber employees at $0.30 strike had a small spread against the $0.35 FMV; filing 83(b) on early-exercised shares cost pocket change and turned the eventual $50-plus IPO gain into LTCG.
Uncommon, but they exist. Some private-company plans grant actual restricted stock instead of RSUs and allow early exercise. If yours does, the 83(b) analysis is the same as for options: file it, start the LTCG and QSBS clocks, move on with your life.
The 83(b) election isn't universally good. Two situations where the math flips:
You joined at Series D. The 409A is $12. Your strike is $3. You early-exercise 100k shares and file 83(b). That's a $9 spread on 100k shares — $900k of ordinary income today. At a 40% combined federal-and-state marginal rate, that's $360k of tax you're paying now on stock that could easily be worth zero in 18 months. The break-even is: does the eventual exit value, taxed at LTCG, beat the after-tax value if you hadn't filed?
For a 5x exit that's a clean yes. For a 1.5x exit or a shutdown, it's a bad bet. Run the calculator up top with your real numbers and a probability-weighted exit assumption before you write the check.
If you have real doubt about whether the company survives, think hard. §83(b)(2) explicitly denies a deduction for forfeited property — so if the shares get repurchased at cost when you leave, or the company shuts down, you can't take an ordinary loss to offset the tax you already paid. You can claim a capital loss, but that only offsets other capital gains plus $3,000 of ordinary income a year. The tax on the phantom income is a real cost that doesn't come back.
The IRS doesn't publish a formal 83(b) election form — there's no Form 83B. What exists is Rev. Proc. 2012-29, which includes a sample statement. Every startup lawyer has a template that riffs on it. Yours will include:
Where to send it: the IRS service center where you file your 1040. That's it. Since 2016 you no longer have to attach a copy to your return, and the IRS no longer sends back an acknowledgment. Which is exactly why certified mail with return receipt is the practitioner-standard delivery method — the return receipt card is your only proof the filing happened.
Keep three copies. One for your personal tax file. One for the company's cap table records — your equity administrator will ask. One in your safe. Ten years from now when your shares get sold in a secondary or an acquisition, the CPA preparing your return is going to ask for the 83(b) filing proof, and "I mailed it in 2026" isn't going to cut it.
The FMV number that drives everything is the 409A. §409A governs deferred comp; a 409A valuation is the independent appraisal that fixes fair market value for tax purposes. Your 83(b) election needs an FMV, and the safe-harbor FMV is whatever the most recent 409A said.
Three practical implications. First, if you early-exercise options right after a new 409A, use that new number — not the one that was in place when the options were granted. Second, if there's a fresh 409A pending and it's likely to be higher (usually the case after a priced round), file before it lands. Third, if the 409A is stale by more than 12 months, the safe harbor lapses and the IRS can challenge the FMV; get a fresh one before you exercise anything substantial.
This is one of the places where equity comp planning turns from "run the calculator" into "call the tax lawyer." The calculator gives you the arithmetic; the lawyer makes sure the numbers you're plugging in are the right ones.
Once the 83(b) is in, the work isn't done. You have a cost basis, a start date for the LTCG holding period, a start date for the §1202 QSBS clock, and — if the company grows — a moving unrealized position that shows up nowhere on a brokerage statement because the shares aren't at a broker.
A consolidated view helps. When your net worth is 65% private-company equity and 35% brokerage plus retirement, the private-company slice needs to sit next to the liquid slice on the same dashboard. wlthy takes the grant details, the vesting schedule, and the last 409A, and shows you a single running position that updates as time and valuations move. The 83(b) filing itself is a one-time event. The tracking is the rest of your life.
Sources referenced
IRC §83, §83(b), §83(b)(2); IRC §409A; IRC §1202; Rev. Proc. 2012-29 (sample 83(b) statement); Rev. Rul. 66-144; §7503 (weekend/holiday postponement); §9100 relief practice. Educational only — talk to a CPA before you file anything.
You paid par for 8 million shares, the 409A is par, the spread is zero. Filing 83(b) costs nothing today and converts every future dollar to LTCG. This is the free lunch — the only debate is whether you certified-mailed the form on time. Ninety percent of missed-83(b) horror stories come from founders who assumed their lawyer would file it and their lawyer assumed the founder would.
If your ISO or NSO plan permits early exercise, filing 83(b) on the day you early-exercise stops the ordinary-income clock at that day's 409A FMV. Later gains are LTCG, and the LTCG holding period starts the day you paid — not the day the shares vest. For high-conviction employees at pre-Series-B startups, this combination is the most tax-efficient equity move available.
You joined at Series D. The 409A is $8. You have 400k options at $2 strike. Early-exercising and filing 83(b) means writing a check for tax on $2.4 million of paper income today, on stock that might be worth nothing in 24 months. This isn't a free lunch — it's a leveraged bet on the outcome. Model it with real forfeiture probability before you file.
It's 30 calendar days from the grant date, not the acceptance date, not the funding date, not the date your lawyer emailed you the stock purchase agreement. Day 1 is the day after the grant. Weekends and federal holidays don't extend it. If day 30 lands on a Sunday, you've still missed it — the postmark must be on or before day 30. Certified mail with return receipt is the standard, because the postmark is your only defense if the IRS loses the paper.
The short answer is: sorry. There's no formal remedy. §83(b)(2) says the election must be made not later than 30 days after the transfer, and the IRS has consistently refused to grant §9100 relief for late 83(b) elections. Some lawyers will tell you to file anyway and hope, but you'd be building your tax position on a document that can be disallowed at any audit. If the miss is caught within a few days, some plans allow you to rescind the grant and re-issue it; that's a corporate action, not a tax fix.
Only if the RSU plan allows early exercise or grants actual stock at issuance, which is rare. Most public-company RSUs are contractual promises — you get shares at vest, and there's nothing to file 83(b) on because you don't own restricted property yet, you own a right to future property. Private-company double-trigger RSUs also fall outside 83(b). If you're at a pre-IPO company and your grant paperwork uses the phrase 'restricted stock' rather than 'restricted stock units,' you probably can file — check with your equity administrator.
It plays nicely, and this is often the reason to file. §1202 exempts up to 100% of gain on qualified small business stock held more than five years, capped at the greater of $10M or 10x basis. The five-year clock starts on the acquisition date, and for founder stock that's the grant date — but only if you filed 83(b). Without the election, the clock arguably starts at vest, which pushes your first eligible exit years down the road. Every startup lawyer with QSBS experience will push you to file 83(b) on day one for exactly this reason.
ISO early exercise plus 83(b) is common but the AMT interaction bites. The spread between FMV at exercise and strike price is an AMT preference item in the year of exercise, even with a valid 83(b) filed. If the spread is meaningful — say, more than $50k for a single filer — you'll want a projection before you write the check. The good news: AMT paid on ISO exercise becomes a credit you claim against regular tax in later years, so it's often a timing issue rather than a permanent tax.
You paid tax on ordinary income today. The stock later becomes worthless because the company shuts down, or you leave before vesting and the shares get repurchased at cost. Under §83(b)(2), you can't claim a deduction for the forfeited income. What you can claim: a capital loss on the shares you paid for and then had repurchased below basis. That loss is capital, not ordinary, so it only offsets other capital gains plus $3,000 of ordinary income a year. The tax you already paid on the phantom income is gone.
Most startup equity ends here — the company shuts down, the stock is worth zero, and you've been paying tax at each vest under the no-election path. If you filed 83(b), you paid tax on the grant-day spread up front. If that spread was zero (founder case), you paid nothing and lose nothing. If the spread was substantial (late-stage early-exercise case), you paid real tax on income that evaporated. This is why the calculator up top isn't a rubber stamp — for later-stage joiners, the math can flip.
wlthy tracks vesting schedules, cost basis per grant, current FMV from the last 409A, and the potential embedded gain across every equity position you hold. When you have grants across three portfolio companies plus a public RSU stream, the tax posture of each one drifts as time passes. wlthy shows you the running unrealized position and the vested-vs-unvested split without any spreadsheet gymnastics. The equity view integrates with the wider net-worth picture, so you can see the whole balance sheet in one screen.
An 83(b) filing is one date on a page. The vesting schedule, the running cost basis, and the §1202 clock keep moving for years. wlthy rolls the grants into one running number so you can see where you stand without a spreadsheet.
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