A Florida multi-member LLC defaults to partnership tax treatment under the IRS check-the-box rules. That means health insurance premiums for members follow partnership rules — guaranteed payment on Form 1065, Schedule 1 Line 17 deduction on the member's personal return — while premiums for W-2 employees are deducted as a normal business expense. If the LLC has elected S-corp status (Form 2553), the rules shift to S-corp >2% shareholder treatment instead. Knowing which set of rules applies prevents the most common error: deducting a member premium twice.
Without an entity election, a Florida multi-member LLC files Form 1065 and issues K-1s. Member health insurance premiums are guaranteed payments. Mechanics:
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| Person Covered | Form 1065 Line | K-1 Box | Personal Return Treatment |
|---|---|---|---|
| W-2 employee (non-member) | Line 19 (Employee benefit programs) | — | Not on personal return |
| LLC member (default partnership) | Line 10 (Guaranteed payments) | 4a + 13M | Sch 1 Line 17 deduction |
| LLC member (S-corp election, >2% owner) | 1120-S Line 7 wages | — | Sch 1 Line 17 deduction |
An LLC that filed Form 2553 to elect S-corp taxation switches to S-corp rules for member premiums. Members who own more than 2% of the LLC are >2% shareholders. Their premiums are added to W-2 Box 1 wages (not Box 3 or 5), deducted by the LLC as wages, and recovered on the member's personal return at Schedule 1 Line 17. The election can produce SE tax savings on profit distributions but adds payroll administration and reasonable-compensation requirements.
A licensed Florida broker plus a CPA pair to ensure premiums flow through the correct tax line.
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