Updated April 2026 · Florida Plan Finder · Licensed Florida Health Insurance Producer

Common Ownership & Affiliated Business FTE Counting in Florida

A Florida small business owner with two or more entities under common ownership must combine the employees of all entities when counting FTEs for ACA employer mandate purposes and Section 45R Small Business Health Care Tax Credit eligibility. The rules are technical — Section 414 controlled group rules combine with Section 318 attribution to determine when two entities count as one 'employer.' Getting the analysis wrong can mean an unexpected ACA penalty or a disallowed tax credit.

Triggering Patterns

Attribution Rules — Family

For controlled group testing under Section 1563/318:

• Spouse: automatically attributed (community property and ownership combined)
• Children under 21: automatically attributed to parents (and vice versa)
• Parents to children over 21: attributed only if child also has independent stake
• Grandparents and grandchildren: attributed in many tests
• Brothers and sisters: NOT directly attributed (siblings are separate owners)

Worked Example: Florida Restaurant Owner

Owner with three restaurant LLCs under separate names but all 100% owned. Each LLC has 18 W-2 employees. Single-LLC test would be:

• LLC #1: 18 EE → not ALE
• LLC #2: 18 EE → not ALE
• LLC #3: 18 EE → not ALE

Aggregated test (controlled group):

• Combined: 54 EE → ALE (must offer coverage to full-time employees or pay penalty)

The owner who treats each LLC as a separate small employer faces ACA penalty exposure on all three.

Section 45R Small Business Credit Implications

The same aggregation applies in reverse for the credit. A Florida entrepreneur with two entities of 12 employees each = 24 combined FTEs. The combined entity may still qualify for the credit (under 25 FTE), but the credit is calculated on the combined group, not separately for each LLC. Average wage is also calculated across the combined group.

Restructuring to Avoid Aggregation

Restructuring options exist but often don't work as cleanly as owners hope:

• Sell partial ownership to unrelated party: if the unrelated party owns >20%, the 80% test for parent-subsidiary fails — but brother-sister can still apply if owner retains >50% of multiple entities
• Use different family members as nominal owners: family attribution typically defeats this strategy
• Separate operationally without separating ownership: doesn't change controlled group status

Restructuring should be driven by genuine business reasons, not solely benefit avoidance, to withstand IRS scrutiny.