Qualifications

• Sole Proprietor Must be married. Spouse is/could be employed by the business and provide(s) meaningful service(s). Compensation must be reasonable.
• Partnership Must be married. Spouse is/could be employed by the business and provide(s) meaningful service(s). Compensation must be reasonable. Spouse can not be owner in partnership.
• Limited Liability Company Must be married. Spouse is/could be employed by the business and provide(s) meaningful service(s). Compensation must be reasonable. Spouse can not be a principle party to the L.L.C. To learn if a L.L.C. qualifies it must first be determined what taxing entity the business is operating under, then follow those rules.
• Corporation (Sub S) Benefits are not available to spouse because of Internal Revenue Code Attribution rules. Owners are eligible but reimbursements would be W-2 income and subject to FIT and state tax. With a written plan the reimbursements would not be subject to Social Security/Medicare tax, thus saving about 15.3%.
• Corporation (Regular) No requirements for spousal employment.

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