An 83(b) election tells the IRS to tax restricted founder stock when it is granted, at its low value, instead of each time it vests. It must reach the IRS within 30 days of the grant. For founders who will never be US taxpayers it may not matter, but many file anyway as a precaution. Decide with a tax adviser before day 30, not after.
- The deadline is 30 days from the grant of restricted stock. It cannot be extended or cured later.
- The IRS introduced Form 15620 for the election; a signed written statement is also accepted.
- Without the election, a US taxpayer can owe tax on the value of shares each time they vest.
- Non-US founders with no US tax exposure may not benefit, but plans change: moving to the US later is the common trap.
- Keep proof of mailing. Certified mail with a receipt is standard.
Why does the 83(b) election exist?
Founder stock in a Delaware company is usually subject to vesting: if you leave early, the company can buy back unvested shares. US tax law treats such stock as "restricted". By default, a US taxpayer is taxed as the shares vest, on their value at each vesting date. If the company's value rises, so does the tax, even though nothing was sold.
Section 83(b) of the US Internal Revenue Code lets you choose to be taxed at grant instead. At formation the shares are worth almost nothing, so the tax is close to zero, and later growth is taxed as a capital gain only when you sell.
What is the 30-day trap?
The election must be filed with the IRS within 30 days of the stock grant. Miss it and there is no fix. Founders commonly miss it because the grant date is buried in incorporation paperwork, because they are busy, or because they assume, as non-US founders, that US forms are irrelevant.
Does it matter if you are not a US taxpayer?
Possibly not, if you never become one. US tax on vesting applies to US taxpayers and to income connected with the US. A German resident founder of a Delaware company may have no US tax on vesting at all. Two situations change that:
- You move to the US, or get a green card, while your shares are still vesting. Vesting after that point can be taxable in the US.
- You have other US tax connections, such as US citizenship or US-source compensation.
Because the election is cheap at formation and impossible later, many advisers suggest that non-US founders file it as a precaution where there is any chance of US exposure. Your home country also matters: Germany taxes its residents on their worldwide income, and German rules on restricted shares do not mirror US rules. Ask both questions.
How do you file?
- Get the grant details: number of shares, grant date, price paid and fair market value.
- Complete the IRS form for the election (Form 15620) or a written statement with the required information.
- Sign it and send it to the IRS office where you would file a return, within 30 days. Use certified mail and keep the receipt.
- Give a copy to the company.
- Non-US founders without a US taxpayer number should ask their adviser how to complete the identification fields.
What else should be in place at incorporation?
Founder vesting itself, IP assignment and a clean cap table. We explain the vesting mechanics, including how Germany does it differently, in founder vesting in Germany. If you are moving a German company under a Delaware parent, read Delaware flip from Germany first, because the grant date of your new stock is set during the flip.
What information goes into the election?
- Your name, address and taxpayer identification number (if any).
- A description of the property: the number and class of shares and the company.
- The date of transfer and the tax year.
- The restrictions on the shares (the vesting and repurchase terms).
- The fair market value at transfer and the amount you paid.
If you paid the fair market value for your shares, the taxable amount at grant is zero, which is the usual case for founders at formation.
Frequently asked questions
What is the 83(b) deadline?
30 days from the date the restricted stock is granted. The IRS does not extend it.
Do non-US founders need to file an 83(b) election?
Not always. If you will never be a US taxpayer, the election may have no effect. Many non-US founders file it as a precaution in case they move to the US while shares are still vesting. Ask a tax adviser.
Which form is used for an 83(b) election?
The IRS provides Form 15620 for the election. A signed written statement containing the required information is also accepted.
What happens if I miss the 83(b) deadline?
For a US taxpayer, each vesting event can be taxed at the shares' value at that time. There is generally no way to file late.
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Join the waitlist →Sources and further reading. IRS, About Form 15620; 26 U.S.C. §83; Y Combinator documents.
Educational material, not legal, tax or investment advice. Rules and figures change; confirm with qualified counsel or a tax adviser in your jurisdiction before acting. Last updated October 6, 2026.