Dependent care assistance for employees belongs on Line 14, employee benefit programs.
Why line 14
A written dependent care assistance program is one of the named employee benefit programs, so what you pay under it goes on line 14. The amount is deductible to you whether or not it is tax-free to the employee; the exclusion cap affects the employee's W-2, not your line 14 figure. Help with your own child care as the owner is personal and is not a business deduction at all.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so dependent care assistance for employees lands on Line 14 without you sorting it.
Start for freeWhat dependent care assistance for employees is confused with
- Line 26, wages
- Child care money handed to an employee outside a written plan is simply extra pay, reported in wages on line 26.
- not deductible, not deductible
- Dependent care for you or your family is a personal cost with no Schedule C deduction, whatever the business pays it from.
Examples that belong on line 14
- $3,000 a year toward a W-2 manager's daycare under a written plan
- A $200 a month dependent care reimbursement processed through payroll
- Fees you pay directly to a licensed daycare on behalf of an employee
- Running costs of an employee child care room you operate on site
What does not belong here
- Your own child's daycare while you work, which is personal and may instead support the personal child and dependent care credit
- Amounts above what the plan document allows, which become taxable wages on line 26
- A verbal arrangement with no written plan, which does not qualify as a benefit program
The limit that applies
The employee exclusion is capped each year, and anything above the cap is taxable to them while still deductible to you.
What to keep
Keep the written plan, provider invoices or receipts naming the employee, and payroll records showing any taxable excess.
Other expenses on line 14
| Expense | Line |
|---|---|
| an employee educational assistance program | Schedule C, Line 14 |
| an employee wellness or gym benefit | Schedule C, Line 14 |
| employee health insurance premiums | Schedule C, Line 14 |
| group term life insurance for employees | Schedule C, Line 14 |
| HSA contributions for employees | Schedule C, Line 14 |
Related lookups
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so dependent care assistance for employees lands on Line 14 without you sorting it.
Start for free