This is a question that was recently asked by one of my client. The answer, as with most issues involving the NFA and ATF regulations, requires a slightly detailed answer.
First let’s talk about the general requirements for completing an 80% lower into a Title 1 firearm. Unless your state has a requirement that is more stringent than federal law you do not legally need to engrave your 80% receiver when you complete it.
However … the ATF suggests that you “at least identify the firearm with a serial number as a safeguard in the event that the firearm is lost or stolen.”
In addition, the ATF requires that“if it is sold or otherwise lawfully transferred in the future … [it] should be identified as required in 27 CFR478.92.”
Given that requirement, I generally would suggest that those completing an 80% lower into a Title 1 firearm should complete the engraving process at the time of completion to maximize the future utility of their firearm.
If however the 80% lower is going to be the basis for an SBR then the lower does legally need to be engraved and I would suggest engraving it prior to submitting your Form 1.