Group term life insurance for employees belongs on Line 14, employee benefit programs.
Why line 14
Premiums on a group term policy covering your employees are an employee benefit program, so they sit on line 14 with the rest of the benefits you provide. The deduction turns on you not being the beneficiary: if the policy pays you or your business, the premium is not deductible at all. Coverage on your own life is never a line 14 item, whoever receives the proceeds.
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 group term life insurance for employees lands on Line 14 without you sorting it.
Start for freeWhat group term life insurance for employees is confused with
- not deductible, not deductible
- If you or your business is directly or indirectly the beneficiary, the premium is not deductible, whoever the insured person is.
- Line 26, wages
- The imputed cost of coverage above the tax-free limit is added to that employee's W-2 pay and shows up in wages on line 26, while the premium itself stays on line 14.
Examples that belong on line 14
- $38 a month for a $50,000 group term policy on each of three W-2 employees
- A $1,100 annual group life premium inside your payroll provider's benefits package
- Accidental death coverage bundled into the same employee group policy
- The employer-paid portion of a voluntary life plan where the employee's family is the beneficiary
What does not belong here
- A policy on your own life, which is not deductible when you or your family collects
- Key person coverage on a lead employee where the business is the beneficiary
- Payments on a whole life policy building cash value for the owner
The limit that applies
Group term coverage above the statutory tax-free amount creates imputed wages for the employee even though your premium stays deductible on line 14.
What to keep
Keep the group policy, the schedule of covered employees, and the premium invoices. Where coverage exceeds the tax-free limit, keep the imputed income calculation that fed payroll.
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 |
| dependent care assistance for employees | Schedule C, Line 14 |
| employee health insurance premiums | 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 group term life insurance for employees lands on Line 14 without you sorting it.
Start for free