Equity Compensation: E-Filing Section 83(b) Elections
In July 2025, the Internal Revenue Service (IRS) modernized the process used to file elections under Section 83(b) of the Internal Revenue Code of 1986 (“Section 83(b)” and “83(b) elections”) by allowing taxpayers to file elections electronically. This article provides an overview of how to file an 83(b) election online and key considerations for founders and service providers. (General information about 83(b) elections is available here.)
How Does the Electronic Filing Process Work?
To file electronically, taxpayers must create an ID.me account, verify their identity and complete a short questionnaire that generates Form 15620. The form can be submitted electronically, at which point the taxpayer receives immediate confirmation of receipt—a major improvement over the old mail-only system.
Can Taxpayers Still File by Postal Mail?
Yes. Taxpayers may file Form 15620 or a custom 83(b) election statement by postal mail. There may be certain situations where a custom Section 83(b) election statement may still be preferable, such as elections with respect to revesting agreements, if the taxpayer is an entity, or if the price paid per share has more than two decimal places (e.g., $0.0001).
What Requirements Remain Unchanged?
While taxpayers may now file 83(b) elections electronically, the key requirements for making a valid Section 83(b) election remain the same, including:
What Steps Should Employers Take in Light of This Change?
Employers should update their equity grant procedures and documentation to inform employees and other service providers of the new electronic filing option. This may include incorporating direct links to Form 15620 and the IRS’s filing portal in equity award notices. Employers may also wish to take this opportunity to assess internal processes for tracking 83(b) elections submitted by employees and other service providers.
Note on Tax Advice: This article is provided for informational purposes only and does not constitute legal, tax or accounting advice. Taxpayers should consult their own legal and tax advisors for guidance and assistance in filing their 83(b) elections.
How Does the Electronic Filing Process Work?
To file electronically, taxpayers must create an ID.me account, verify their identity and complete a short questionnaire that generates Form 15620. The form can be submitted electronically, at which point the taxpayer receives immediate confirmation of receipt—a major improvement over the old mail-only system.
Can Taxpayers Still File by Postal Mail?
Yes. Taxpayers may file Form 15620 or a custom 83(b) election statement by postal mail. There may be certain situations where a custom Section 83(b) election statement may still be preferable, such as elections with respect to revesting agreements, if the taxpayer is an entity, or if the price paid per share has more than two decimal places (e.g., $0.0001).
What Requirements Remain Unchanged?
While taxpayers may now file 83(b) elections electronically, the key requirements for making a valid Section 83(b) election remain the same, including:
- Timing: The 83(b) election must be filed no later than 30 days after the date the property is transferred to the taxpayer (e.g., the exercise of the option or receipt of restricted stock).
- Required Content:
- The taxpayer’s name, address and taxpayer identification number.
- A description of the property (e.g., restricted stock) with respect to which the election is being made.
- The date(s) of transfer and the taxable year for which the election applies.
- The nature of any restrictions (e.g., vesting schedule, repurchase rights, or forfeiture provisions).
- The fair market value of the property at the transfer date (ignoring lapse restrictions).
- The amount, if any, paid for the property (e.g., the exercise price or purchase price).
- A statement that copies of the election have been furnished to other persons as required (i.e., the employer or issuer).
- Copy to the employer: The taxpayer must furnish a copy of the 83(b) election statement to the service recipient (typically the taxpayer’s employer).
What Steps Should Employers Take in Light of This Change?
Employers should update their equity grant procedures and documentation to inform employees and other service providers of the new electronic filing option. This may include incorporating direct links to Form 15620 and the IRS’s filing portal in equity award notices. Employers may also wish to take this opportunity to assess internal processes for tracking 83(b) elections submitted by employees and other service providers.
Note on Tax Advice: This article is provided for informational purposes only and does not constitute legal, tax or accounting advice. Taxpayers should consult their own legal and tax advisors for guidance and assistance in filing their 83(b) elections.