Workers' compensation insurance belongs on Line 15, insurance.
Why line 15
Workers' compensation premiums set by state law to cover injuries and job-related illness suffered by your employees are business insurance on line 15. They are not taxes, even when you pay them to a state fund, so line 23 is the wrong home. Where you elect coverage on yourself as the owner, that slice insures your own injury and is treated like owner disability coverage rather than a business premium.
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 workers' compensation insurance lands on Line 15 without you sorting it.
Start for freeWhat workers' compensation insurance is confused with
- Line 23, taxes and licenses
- A state fund workers compensation premium is insurance on line 15; the payroll taxes you remit on the same wages are the line 23 item.
- not deductible, not deductible
- The part of the premium covering you, the owner, rather than your employees insures your own injury and is not deductible.
- Line 26, wages
- Wages paid to an injured employee are still wages on line 26; only the premium is insurance.
Examples that belong on line 15
- A $1,900 annual workers compensation policy for two employees through a state fund
- $240 a month for a three-person landscaping crew
- A $310 premium audit true-up bill after payroll came in higher than estimated
- A $450 minimum premium for a business with one part-time employee
What does not belong here
- Payroll taxes, which are line 23
- Unemployment insurance contributions, which are also a payroll tax on line 23
- The elective coverage slice on yourself as owner
What to keep
Keep the policy, the payroll audit worksheets, and the premium notices including any audit true-up. The audit worksheet is what shows which people the premium covered.
Other expenses on line 15
| Expense | Line |
|---|---|
| a business owner's policy | Schedule C, Line 15 |
| a surety or performance bond premium | Schedule C, Line 15 |
| business interruption insurance | Schedule C, Line 15 |
| commercial property insurance | Schedule C, Line 15 |
| cyber liability insurance | Schedule C, Line 15 |
| general liability insurance | Schedule C, Line 15 |
| professional liability insurance | Schedule C, Line 15 |
Related lookups
- Where does a business license go on Schedule C?
- Is a car payment deductible on Schedule C?
- Can I pay my child and deduct it on Schedule C?
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 workers' compensation insurance lands on Line 15 without you sorting it.
Start for free