One of the great privileges of living in a democracy such as the United States of America is the ability to participate in and influence the political process.
One way that some Americans choose to exercise their political freedom is through donations to political campaigns, parties, or other related causes. Since you’re a financially savvy individual, you may have wondered if you can deduct any of these political donations when it comes time to file your income taxes. After all, you can deduct charitable donations, so why not political campaign contributions and the like?
Well, wonder no longer. In today’s article, we’ll explore whether or not political donations are tax deductible. Read on to find out the answer.
What the IRS Says About Political Donations and Lobbying Activities
Unlike many other tax matters, the IRS website contains a straightforward answer to whether or not you can deduct campaign contributions or other political donations. The answer? No, you cannot.
Here’s the IRS’s official statement on the matter straight from Publication 529 (2016), Miscellaneous Deductions:
“You can’t deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate aren’t deductible.”
There are very, very few exceptions to the above statement, and those that exist aren’t for actual “political donations”. The only remotely related activity that could qualify you for certain deductions is if you work as a political lobbyist. In that case, you may be able to deduct certain expenses that you incur in the course of your normal business.
While on the subject of lobbying, we should discuss that the IRS rules for deducting money spent to influence the political process in any way go far beyond political donations. The IRS also has strict rules governing all lobbying activities. Here’s their official statement from Publication 529:
“You generally can’t deduct amounts paid or incurred for lobbying expenses. These include expenses to:
- Influence legislation,
- Participate, or intervene, in any political campaign for, or against, any candidate for public office,
- Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or
- Communicate directly with covered executive branch officials in any attempt to influence the official actions or positions of those officials.
- Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities.”
While the IRS doesn’t explicitly say so, the above rules also prohibit you from deducting donations to political action committees (PACs) or Super PACs.
At this point, you may have given up on attempting to take any deductions made to political campaigns or causes. On the federal level, this is the correct action. But there are some cases in which you can deduct contributions to state political causes, which we’ll explore in the next section.
State Tax Credits for Political Contributions
If you live in the following states, then you can receive a state tax credit for certain kinds of political contributions:
The specific credit amounts and the rules governing them are different for each state. Let’s explore them in more detail.
In Oregon, you can receive a tax credit for contributions to political action committees (PACs) and individual candidates for state, local, and federal elections. The only requirement is that the individual candidates must have been on the state ballot for the election in the tax year for which you are claiming the credit. Individual filers making less than $100,000 can claim a credit for the amount of their contribution up to $50 and joint filers making less than $200,000 can claim the same credit up to $100. You’ll need to provide documentation of the contributions when you file.
Ohio is a bit stricter than Oregon, restricting its tax credits to contributions made to candidates for state elections for the following political offices:
- Lieutenant Governor
- Secretary of State
- State Auditor
- Attorney General
- Member of the state board of education
- Justice of the supreme court
- Member of the general assembly
Assuming you’ve contributed to one of the above individual candidates in the tax year for which you are filing, you can receive a tax credit for the amount of your contribution up to $50 as an individual filer and up to $100 if you file jointly. You can claim this credit regardless of your income, but you’ll need documentation of your contributions.
Finally, there’s the case of Arkansas. Arkansas’s rules are much the same as Ohio’s. Regardless of your income, you can receive a tax credit for your political contributions up to $50 if you’re filing as an individual and up to $100 if you’re filing jointly. This credit only applies to documented contributions to candidates (or the committees of candidates) seeking nomination or election to a state public office, as well as to state-approved political action committees or organized political parties.
Discover What You Can and Can’t Deduct
As you can now see, most political contributions aren’t tax deductible. There are a few exceptions if you’re a resident of certain states, but for most of your political contributions, you’ll just have to let the satisfaction of supporting political causes you believe in be its own reward.
However, that doesn’t mean that you can’t find lots of other sweet tax deductions and credits. With the right tax preparation software, you can discover tons of potential savings for all the things you already spend your money on.
To help you start saving as soon as possible, we’ve put together reviews of all the top tax software on the market. With the right tax software and the tax tips you’ll receive when you sign up for our weekly newsletter, you’ll be on your way to a lower tax bill in no time…or at least before the next election rolls around.