It’s been quite a year politically speaking. With the heated battles that have taken place there is one thing for sure, American citizens were fully vested in the outcome. Perhaps you contributed some cash toward your chosen party or candidate. But what does that political contribution mean for your tax return?
What is a Political Contribution?
A contribution is a voluntary gift of money, time, service, or ideas, made to a worthwhile cause. A political contribution is a voluntary gift of money, time, or service to a political party, organization, or a candidate for public office.
For a contribution of any sort to be considered tax deductible the money given must be given to a non-profit organization that has been given a specific IRS designation, a 501c3.
There are many stipulations for organizations to be eligible for 501c3 status. One of the most notable regulations is that the organization cannot participate in, intervene in, either directly or indirectly, any political campaign on behalf of any candidate or public office. Therefore, a political party, or candidate cannot qualify as a 501c3.
So what does that mean for you?
Given that a political party or candidate can’t be considered a non-profit, your donation cannot be considered as a charitable deduction.
It’s good to participate in the election of our government officials. There are many ways to engage in the political system. However, if you choose to do so by contributing financially toward your political party, candidate or lobbying organization, know that your contribution is not tax deductible.
Exceptions to the Rule
Of course with the tax code there are nearly always exceptions to any rule. One of which is when a political organization has a separately funded non-profit division. Generally, this can be seen when an organization has an education division dedicated to providing educational resources to the public with no-profit being received.
In the case that you donate directly to the non-profit educational division of a political organization your contribution may be deductible.
If you have any questions regarding charitable giving give us a call, 740•374•6942.