Tax
Section 83(b) Election
Quick definition
Tax election for restricted stock holders to be taxed on grant-date value instead of vesting value.
A Section 83(b) election lets you pay ordinary income tax on the value of restricted stock at grant instead of at vesting — nearly always beneficial if current value is low and expected to rise. Must be filed with the IRS within 30 days of grant.
Related tax terms
R&D Tax Credit
Federal credit for qualified research expenses, usable against payroll tax by startups.
Delaware Franchise Tax
Annual tax for Delaware corporations, often quoted wildly too high if calculated incorrectly.
Nexus (Sales Tax)
The connection with a state that triggers a tax-collection obligation.
QSBS (Qualified Small Business Stock)
Tax exemption for gains on qualifying startup stock held 5+ years.
See this in action
Insights and tools where Section 83(b) Election shows up.
Frequently asked questions
- What is Section 83(b) Election?
- A Section 83(b) election lets you pay ordinary income tax on the value of restricted stock at grant instead of at vesting — nearly always beneficial if current value is low and expected to rise. Must be filed with the IRS within 30 days of grant.
- Why is Section 83(b) Election important for startups?
- Section 83(b) Election is a tax concept that matters for startup founders because it directly affects fundraising readiness, financial decision-making, or operational discipline at the stage where mistakes are expensive to undo. Founders who understand it have a meaningfully easier time in diligence, board meetings, and investor conversations.
- What category does Section 83(b) Election belong to?
- Section 83(b) Election is a Tax term in the StartupCFO finance glossary — alongside other tax concepts that founders, CFOs, and accountants use in daily startup operations and reporting.
- Where can I learn more about Section 83(b) Election?
- Beyond this definition, see the related tax terms below, or explore StartupCFO's insights and tools that put Section 83(b) Election in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
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