Answers|Dictionary

When is the deadline to file an 83(b) election?

83(b)EquityTaxCompliance

Thirty days after the date the stock was transferred to you, which for a founder is normally the date the restricted stock purchase agreement was signed and the shares issued. The statute says the election must be made not later than 30 days after the date of transfer. There is no extension, no reasonable-cause relief and no late-filing procedure. It is the least forgiving deadline most founders will ever meet.

How the days are counted

The transfer date is day zero. The day after is day one, and the election must be postmarked or submitted by day 30. Calendar days, not business days. Shares issued on the 1st of a 31-day month are due on the 31st. Count it on a calendar, then file well inside the window.

Weekends and holidays

Section 7503 of the tax code says that when the last day for doing anything under the internal revenue laws falls on a Saturday, Sunday or legal holiday, doing it on the next day that is none of those counts as timely. The instructions to Form 15620 apply that rule to the election in terms: if day 30 is a Saturday, the election is timely if postmarked on the Monday. Legal holiday means a holiday in the District of Columbia, or a statewide holiday in the state where the IRS office you file with sits. It is a safety net for a miscount, not a plan.

Postmark, not receipt

For a mailed election the date that matters is the postmark, under the timely-mailing rule in section 7502. An election postmarked on day 30 that reaches the IRS on day 40 is on time. That is why certified mail matters: the receipt carries a date the post office stamped, and it is the proof that the postmark fell inside the window. For an election submitted through the IRS's online form, the submission date on your confirmation is the date.

The clock runs from the transfer, not from when you sign the election or when the board approved the grant. If the stock agreement records an issue date earlier than the day you actually signed it, count from the earlier date.

Written by the lawyers who built Arabella. This is legal information, not legal advice for your situation, and reading it does not make us your lawyers. For a real dispute or a high-stakes decision, talk to a licensed attorney. More questions.