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Section 83(b) allows taxpayers to elect to include in their current taxable income certain compensation that would not otherwise be taxable until a future year. For example, a taxpayer that receives restricted stock compensation that would be taxable in future years as it vests often will make a Section 83(b) election to be taxed on the full value in the year the stock is awarded in order to be taxed on a lower value. Section 83(b) elections are also commonly made with respect to the grant of profits interests.
Historically, there was no form provided by the IRS for making a Section 83(b) election. In 2024, the IRS created Form 15620 that could be used to file a Section 83(b)election. If the form was used, taxpayers needed to print and complete the form and file it by mail. Effective in 2025, Form 15620 can be filed electronically through the IRS's website.
Taxpayers are not required to use Form 15620 to make a Section 83(b) election nor are they required to file it electronically. However, if a taxpayer wants to file electronically, they must use the form.
Bottom Line: Taxpayers now have options for filing a Section 83(b) election. Given the 30-day time limit on making the election, filing electronically may help avoid missing the deadline.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
