Do I need to file an 83(b) election if vesting is imposed on my stock after it is issued?

Takeaway: Usually no—but if vesting is added shortly after issuance (often within 3–4 months), the IRS may treat it as part of a single transaction that requires an 83(b) election within 30 days.

This is one of the more complex and timing-sensitive tax questions founders face. Suppose you formed your company, purchased fully vested stock, and later—perhaps as part of a financing or to align with a new co-founder—you agree to place those same shares under a new vesting schedule. Does this “re-vesting” create a new 30-day window to file an 83(b) election?

The answer depends on the timing and intent behind the stock issuance and the new vesting.

The General Rule: No New Filing for a “Stale” Vest

An 83(b) election is triggered when there’s a transfer of stock that is subject to a substantial risk of forfeiture. If you’ve held your stock in a fully vested state for a significant period before adding vesting, there’s no new transfer—the company isn’t giving you new property, just modifying your rights.

Example: If a founder agrees to re-vest shares years after incorporation in connection with a financing, most tax practitioners view a new 83(b) filing as unnecessary.

The Key Exception: The “Integrated Transaction” Doctrine

If vesting is imposed soon after the initial issuance, the IRS may treat the two events as one transaction.

Example: You form your company and purchase fully vested stock on Day 1. Three months later, you agree to put all your shares on a four-year vesting schedule.

Risk: The IRS could argue that the stock was always intended to be subject to vesting and that the two steps were artificially separated to avoid an 83(b) filing. Under this view, you effectively received unvested stock and must file an 83(b) election within 30 days of the vesting being imposed.

While there’s no strict cutoff, a gap of less than 3–4 months between issuance and vesting is generally considered high risk for being treated as an integrated transaction.

Disclaimer: This post is for general informational purposes only and does not constitute legal, tax, or financial advice. Reading or relying on this content does not create an attorney–client relationship. Every startup’s situation is unique, and you should consult qualified legal or tax professionals before making decisions that may affect your business.