Especially around election season, voters in the U.S. are pummeled with requests for donations from political candidates and causes.
Ads are everywhere… on TV, on the radio, all over the Internet, on billboards, we get calls, we get emails and on and on. Yes, the candidates want your vote. But, more than that, they want your money.
These fundraising campaigns are highly effective. People pour billions of dollars a year to political candidates, parties, causes and more.
This brings up an interesting question come tax season. Are political donations tax deductible? So let’s leave politics aside, put on our accounting hat and look to see if we can get a break on our taxes when we send money to those in the political world.
Are Political Donations Tax Deductible?
This may come as a surprise to many, but the answer here is no. Political contributions are not tax deductible.
So if you send money to a political campaign, that’s money that will not give you any benefit come tax time and will not affect your deductions.
According to the Internal Revenue Services, any money you donate to a candidate’s political campaign cannot be deducted from your taxes.
Most of the time, when you donate to another person or another entity, you will be subject to donor’s tax deduction. However, that is not the case when you donate to a political campaign.
The lack of tax deductibility for donating to political campaigns is provided under the Omnibus Election Code or OEC, as well as the Republic Act 7166. According to the OEC, donations that are spent during the campaign period are exempted from donor’s tax.
However, contributions donated before or after the campaign period is subjectable to the donor’s tax. What are not tax deductible when it comes to donations are the following:
- Political candidates
- Political parties
- Campaign committees
- Newsletter funds
- Ads in convention bulletins
- Political Action Committees or also known as PACs
- Attendance to programs benefiting a political candidate or party
When it comes to businesses, business owners and self-employed people, the same could be said. This means that even their political contributions are also not deducted to their taxes.
What About In-Kind Donations?
Money is not the only thing you can donate to a political campaign or anything at all. There are also in-kind donations that you can donate to a political campaign.
What are considered as in-kind donations are the following:
- Tangible goods
- Your services
- Your time
When it comes to in-kind donations to a political campaign, they are not tax deductible either. So whatever it is that you donate to a political campaign, it will not give you any sort of benefit on your taxes.
Politicians Are Not Charities
Now, the reason why political donations are not tax deductible, as opposed to other people or entities, is because they are not considered charities.
Charities are called qualifying organizations. The following are a few examples of types of qualifying organizations:
- Religious organizations including:
- Other types of chapels
- Federal, state, and local governments if donations are for public purposes
- Nonprofit schools and hospitals
- War veterans groups
- Community service orgs
We get tax deductions when we donate to these types of organizations. So, if part of your motivation for making a donation is for the tax deduction, stick to these types of groups.