Can you have a Solo 401(k) if you own multiple businesses?

Can I have a Solo 401(k) if I own more than one business?

It depends entirely on whether your businesses are legally "commonly controlled" or "affiliated" under the tax code, not on how many separate LLCs, EINs, or bank accounts you have. The IRS does not look at how you have organized your paperwork. It looks at who owns what, and in service-industry cases, who works with whom.

Two federal tests do this work. A controlled group, under IRC 414(b) (corporations under common ownership) and 414(c) (any other business, including partnerships, sole proprietorships, and LLCs, under common ownership), combines businesses based on ownership percentages. An affiliated service group, under IRC 414(m), combines certain service businesses (law, medical, consulting, accounting, and similar practices) based on how closely they work together, even with no shared ownership at all.

If either test pulls your businesses together, IRC 414(b), 414(c), and 414(m) all state the same consequence: the combined businesses are treated as a single employer for essentially every qualified-retirement-plan purpose that matters to a Solo 401(k), including nondiscrimination testing (IRC 401(a)(4)), the eligibility and coverage rules (IRC 410(a) and (b)), top-heavy testing (IRC 416), and the overall contribution limit (IRC 415(c)). You cannot pick and choose which entity's employees count. The group counts as one.

What is a controlled group for retirement-plan purposes?

A controlled group is a set of two or more businesses under common ownership, treated by the tax code as if they were one company for retirement-plan rules. The rule exists so a business owner cannot dodge covering employees by moving them into a technically separate entity while keeping a "solo" plan at the entity that has no staff. There are three ways a controlled group can form.

• Parent-subsidiary group (IRC 414(b)): one entity (the "parent") owns 80% or more of one or more other entities. This can run through multiple tiers, and can include several subsidiaries at once.
• Brother-sister group (IRC 414(c)): the same five or fewer people (individuals, or certain trusts and estates, not corporations) together own a controlling interest of 80% or more in each business, and their ownership overlaps by more than 50% when you take each person's smallest ownership percentage across the businesses and add those minimums together.
• Combined group: a mix of both, where one entity is a parent in a parent-subsidiary group and also sits in a brother-sister group with others. All members of both groups become one combined controlled group.

This is not limited to corporations. Treasury regulation 1.414(c)-2 defines "organization" broadly enough to include sole proprietorships, partnerships, trusts, estates, and corporations, which pulls single-member and multi-member LLCs directly into the test. An LLC's ownership is measured however it is taxed: typically a 100%-owner interest for a disregarded single-member LLC, or partnership capital and profits interests for a multi-member LLC.

Source: IRC 414(b), 414(c), 414(m), 1563; IRS Employee Plans, "Controlled and Affiliated Service Groups" training deck.

What are the family attribution rules? Does my spouse's business count as mine?

Often yes, and this is the trap that catches the most people off guard. Under IRC 1563(e), applying attribution rules from IRC 318, ownership can be "attributed" from one family member to another for purposes of the brother-sister test, even when the stock or membership interest is legally held by only one spouse.

Spousal attribution is the single most common surprise. A spouse's ownership is generally attributed to the other spouse in full, so two businesses owned separately by each spouse are very often a brother-sister controlled group by default, not two unrelated companies. The narrow exception applies only if all three hold for the year: (1) the non-owning spouse does not participate in the business's management at any time during the year, (2) no more than 50% of the business's gross income comes from passive sources such as rents, royalties, dividends, or interest, and (3) the interest is not subject to conditions restricting the spouse's right to dispose of it in favor of the owner or their under-21 children. Miss any one prong and full attribution applies. In practice, an actively-run small business where the "outside" spouse never touches management still usually fails the passive-income prong, since most operating businesses earn active, not passive, income.

Parent-child attribution is automatic and bidirectional between a parent and a child under 21. Between a parent and an adult child, or a grandparent and grandchild, it applies only if the recipient already independently owns more than 50% of that business. Siblings are not attributed to each other at all. An interest attributed to you from one family member is also not then re-attributed from you to a third family member ("no double attribution"). Ownership can further flow from an organization to its owners (a corporation to a 50%+ shareholder, a partnership to any partner, a trust to its beneficiaries) and back, for counting the five-or-fewer owners in the brother-sister test. Certain non-voting, dividend-preferred stock and treasury stock are excluded from the count under IRC 1563(c)(2).

If one of my LLCs has employees, does that ruin my Solo 401(k) at my other LLC?

If the two LLCs form a controlled group or affiliated service group, generally yes. The rule that matters is IRC 410(b), the minimum-coverage rule, and it applies to the group as a single employer, not to each entity separately. If Business A has no employees and a Solo 401(k), and Business B (commonly owned with A) has employees who have met the plan's age-and-service eligibility requirements (typically age 21 and one year of service, though a plan can set different terms), those employees generally must be offered coverage under the combined employer's plan, and the arrangement must pass nondiscrimination testing under IRC 401(a)(4) and top-heavy testing under IRC 416. You cannot keep running what is functionally a solo-only plan at Business A while Business B's staff goes uncovered. Independent contractors you pay on a 1099, as opposed to common-law employees on payroll, do not trigger this rule; only real employees do.

The one clean safe harbor is having zero eligible common-law employees anywhere in the entire controlled or affiliated group, not zero employees at the specific entity that happens to sponsor the plan. Multiple businesses with no staff at all, regardless of how their ownership is structured, have nothing for the coverage rule to bite on, so a Solo 401(k) at each, or one combined plan covering compensation from all of them, generally works.

What is an affiliated service group, and can it catch me with no shared ownership?

Yes, and this is the trap built specifically for service businesses like law, medical, consulting, and accounting practices that split work across entities. An affiliated service group under IRC 414(m) is a separate, broader test than the controlled-group ownership tests above, and it can apply even when two businesses share no ownership whatsoever. There are two structures.

• A-Org / B-Org groups: a "First Service Organization" (FSO) plus an "A-Org" that owns an interest in the FSO (directly or by attribution) and regularly performs services for or with the FSO, or a "B-Org" that needs no ownership stake at all but instead (1) gets a significant share of its business from performing services for the FSO or its A-Orgs, (2) performs work of a type historically done by employees in that field (measured against practice as of December 13, 1980), and (3) is at least 10%-owned by the FSO's highly compensated employees. An FSO organized as a corporation must be a "professional service corporation" with at least one shareholder licensed to perform the relevant services, such as a doctor, dentist, attorney, or actuary.
• Management groups: these exist purely because one organization's principal business is performing management functions on a regular, continuing basis for another. There is no ownership test and no FSO concept at all. This is the structure that most often catches people off guard: a separate "management company" LLC that handles payroll, admin, or scheduling for a medical or law practice can be swept into an affiliated service group with that practice even with zero common ownership between them.

CAN vs. CANNOT: solo 401(k) scenarios for owners of multiple businesses

The scenarios below are the most common patterns for someone running several LLCs. None of these replace a facts-and-circumstances review from a plan provider or attorney, but they show where the lines generally fall.

Source: IRS Employee Plans, "Controlled and Affiliated Service Groups" training deck; IRC 414(b), 414(c), 414(m), 1563.

What does "genuinely separate" actually mean?

A business is genuinely separate, for this purpose, only if it fails every version of the combination tests above: not 80%+ commonly owned with your other entities under the parent-subsidiary or brother-sister tests (including family attribution), and no A-Org, B-Org, or management-company relationship with them under the affiliated-service-group rules. All of them have to come back negative; passing one test does not offset failing another.

The recurring traps: crossing 80% ownership without realizing it once a spouse's or minor child's interest is added in; treating a "separate" management or back-office LLC as unrelated when it exists mainly to run your other practice's operations (the management-group test has no ownership threshold at all); and assuming a low direct stake (10 to 20%) in a referral partner's business is automatically safe, when a service relationship can pull it into an affiliated service group regardless of ownership percentage.

Because these tests interact (ownership, attribution, and service relationships, layered against a group of businesses that can change year to year), the IRS's own training materials describe controlled-group and affiliated-service-group determinations as facts-and-circumstances calls, not something with a bright-line self-check. Anyone with employees at any commonly-owned or affiliated entity should have this reviewed by a retirement-plan third-party administrator (TPA) or an ERISA attorney before assuming a Solo 401(k) is available anywhere in the group. Getting this wrong is not a paperwork error; it can disqualify the plan.

Worked example: what combining two businesses actually does to the numbers

Say you own Business A (no employees) and Business B (100% owned by you, three eligible W-2 employees). Run as if separate, Business A's owner could contribute up to the full 2026 combined limit under IRC 415(c), which Notice 2025-67 sets at $72,000 (or $80,000 with the age-50+ catch-up), entirely to a Solo 401(k) with no other participants to test against.

Once the controlled-group rule applies, the picture changes in two ways. First, the IRC 415(c) limit is still applied per participant, so the owner's own dollar cap does not shrink, but they are no longer the only participant it is calculated for. Second, and more importantly, Business B's eligible employees must generally be offered a path into the plan, and the whole arrangement must pass nondiscrimination testing under IRC 401(a)(4): the percentage of pay contributed for the owner cannot dramatically outpace what rank-and-file employees receive without a compliant formula (such as a safe-harbor design) built around it. In practice, this usually means extending real contributions to Business B's staff, restructuring the plan design, or, if the group cannot support that cost, the owner not running the plan at the same contribution level at all. The cost of getting this wrong is not one missed number; it is a plan that can fail testing and face correction under the IRS's plan-correction programs.

The flat truth

Owning more than one business does not automatically block a Solo 401(k). Having an employee anywhere in your commonly-owned or affiliated group of businesses is what blocks it, because the IRS's controlled-group and affiliated-service-group rules erase the line between your separate LLCs the moment ownership or a close service relationship crosses their thresholds. The safe pattern is simple to state and easy to get wrong in practice: every business in the group has to be either genuinely below the ownership and attribution thresholds, or have zero eligible common-law employees, all the way through. If you have any employees anywhere in the picture, or any ownership structure that is not obviously simple (a spouse's separate business, a referral partner, a management company, a minority stake), get a controlled-group and affiliated-service-group determination from a TPA or ERISA attorney before you assume a solo plan works. This is exactly the kind of call the IRS's own guidance treats as facts-and-circumstances, not something to self-certify from a blog post.

For the eligibility basics behind a Solo 401(k) before you get to the multiple-business question, see our Solo 401(k) guide. For the 2026 contribution numbers referenced above, see Solo 401(k) contribution limits for 2026. For how the general 401(k) two-role contribution mechanism works, see How does a 401(k) work?, and for comparing account types generally, see Which retirement account should you use?.