"You" can hire a nanny if you want. But if your SCH C business is not "in the business" of providing day care, you can't claim it as a business expense or deduction on the SCH C at all. If the nanny is providing the care in your home, then they would probably be considered a household employee requiring you (not the business) to issue them a W-2 and do all the required withholding from their pay.
