What is a Special Tax 83(b) election?
Section 83(b) of the Internal Revenue Code permits the taxpayer to change the tax treatment of their Restricted Stock Awards. Employees choosing to make the Special Tax 83(b) election are electing to include the fair market value of the stock at the time of the grant minus the amount paid for the shares (if any) as part of their income (without regard to the restrictions). They will be subject to required tax withholding at the time the Restricted Stock Award is received. In addition to the immediate income inclusion, a Special Tax 83(b) election will cause the stock’s holding period to begin immediately after the award is granted.
