• Self-Employed Individuals Cannot Participate (but Their Employee-Spouses and Other Family Members Who Are Employees May Participate, in Some Cases)
  • Members of LLCs and Partners in LLPs Generally Cannot Participate
  • Partners in a Partnership Cannot Participate (but Their Employee-Spouses and Other Family Members Who Are Employees May Participate, in Some Cases)
  • General Partnerships
  • More-Than-2% Shareholders in a Subchapter S Corporation Cannot Participate (Nor Can Their Employee-Spouses or Certain Other Family Members Who Are Employees). Like a sole proprietorship, a Sub chapter S corporation can have a cafeteria plan for its common-law employees. Unlike in a sole proprietorship, however, neither the employee-spouse of the more-than-2% shareholder, nor the more-than-2% shareholder’s children, parents, and grandparents can participate in the Sub chapter S corporation’s cafeteria plan. This is because of the ownership attribution rules.