How to handle 83(b) elections
An 83(b) election is an IRS filing made by an individual, not by the company, within 30 days of receiving certain shares. It can come up in more than one situation, and Cake's role is to put the form, an FAQ, and (for early exercises) a reminder in front of the person who has to file. Whether to file, and the filing itself, sits with the individual and their tax advisor.
Note: This is general information about how Cake works, not tax or legal advice. Whether an 83(b) election is right for a specific situation, and how to complete one, is a decision for the individual and a qualified tax advisor. Cake can connect you with a partner if needed.
When an 83(b) election can apply
An 83(b) election can come up in three situations, all involving shares that are still subject to vesting or a repurchase right:
Restricted stock awards (RSAs) granted under a plan.
Early-exercised stock options, where an employee buys shares before they vest.
Founder shares issued with vesting or repurchase terms attached.
In each case the 30-day clock starts when the shares are received (the grant or exercise date). It is a hard IRS deadline with no extensions. Whether an election is the right move is a personal tax decision, so point the individual to their own advisor.
What the employee sees in My Cake
For restricted stock awards and early-exercised options, the employee gets an 83(b) area in their My Cake portal, so the information follows the shares automatically:
An 83(b) election card with the IRS election form to download and the filing deadline.
An "83(b) election FAQs" panel covering what an 83(b) election is, the timing, and the general steps to file.
Note: The form Cake links to is the blank IRS election form. Cake does not complete, pre-fill, or file the 83(b) for the individual, and the FAQ is general information, not advice. The individual completes and files it with their own tax advisor.
Reminders on early exercises
When you process an early exercise, you can tick Notify employee of their 83(b) deadline to have Cake email the employee a confirmation and a reminder before the 30-day window closes. This box is off by default, so turn it on if you want the reminders sent. The reminder currently applies to the early-exercise flow.
Founder shares with vesting
Founder shares that carry vesting or repurchase terms can also be eligible for an 83(b) election. Cake does not currently surface an 83(b) prompt for founder shares, so founders should note the 30-day window themselves and file with their tax advisor.
What happens next
The shares appear on your Cap Table and in the relevant person's My Cake portal. From there, the 83(b) election is the individual's to make and file with the IRS within the 30-day window, with their own tax advisor. Cake's role is to surface the form, the FAQ, and (for early exercises) the reminder, not to file on anyone's behalf.