How do I make an 83(b) election?
The 83(b) election must be filed with the IRS within 30 days of acquiring the shares.
We publish this article for general informational purposes only.
Clerky products involving the issuance of stock subject to vesting typically include a document called 83(b) Election & Instructions for each stock recipient.
If you are filing an 83(b) election in connection with paperwork you did on Clerky, you should follow the instructions in your personal 83(b) Election & Instructions document instead.
In most cases, startup lawyers strongly advise someone who acquires stock that is subject to vesting to file an 83(b) election with the IRS. Consult your own tax advisor for guidance on whether it is appropriate for your circumstances.
This article outlines suggested best practices for a taxpayer to properly make an 83(b) election. Non-US taxpayers may find helpful information in: How does a non-US taxpayer make an 83(b) election?.
Complete Four Copies of the 83(b) Election
Clerky document sets involving the issuance of stock subject to vesting typically include a document called 83(b) Election & Instructions for each stock recipient, which includes 4 pre-filled 83(b) election forms.
On 4 copies of the 83(b) election form, review, date, manually sign and insert the taxpayer identification number for the taxpayer (and spouse, if applicable).
Send Two Copies to the IRS
Using the transmittal letter included in the 83(b) Election & Instructions document, send two copies to the IRS by USPS Certified Mail with Return Receipt requested. Use the mailing address for the IRS office where the taxpayer files their income tax return. See Where to File Paper Tax Returns With or Without a Payment.
Although sending a second copy of the 83(b) election is not mandatory, it is recommended that taxpayers include it with a self-addressed, postage-paid envelope and request the IRS return it with a date-stamp for record-keeping.
- Send One Copy to the Company
- Keep One Copy for Your Taxpayer Records