Farm Income Expense - Employee Benefit Programs

Employee benefit programs are deductible farm expenses under certain conditions, as outlined in the instructions for Schedule F (Form 1040), Part II, Line 15. These deductions apply to contributions made to employee benefit programs that are not incidental parts of pension or profit-sharing plans (which are reported on Line 23). Examples include accident and health plans, group-term life insurance, and dependent care assistance programs.

Deductible Contributions

• Contributions to employee accident and health plans, group-term life insurance, and dependent care assistance programs are deductible on Line 15 of Schedule F.
• If you are a self-employed person and contributed to a dependent care assistance program, you must complete Form 2441, Parts I and III, to determine the deductible amount.

Non-Deductible Contributions

• Contributions made on your own behalf as a self-employed person to accident and health plans or group-term life insurance are not deductible on Schedule F. However, you may be able to deduct these on Schedule 1 (Form 1040), Line 17, if you paid for health insurance for yourself, your spouse, or dependents. Refer to the instructions for Schedule 1, Line 17, for details.

Reduction for Tax Credits

• Your Line 15 deduction must be reduced by the amount of any credit for small employer health insurance premiums determined on Form 8941. See Form 8941 and its instructions to determine eligible expenses.

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Disclaimer: Always verify details with the current IRS forms and instructions or consult a tax professional for personalized advice. The information provided is based on IRS guidance for the 2025 tax year.