Are Your Political Campaign Contributions Tax Deductible?

27 Apr Are Your Political Campaign Contributions Tax Deductible?

Posted at 10:47h in by Melissa Wilson  •  0 Comments

keeping-your-balance-team-taxes0Americans and presidential candidate hopefuls are gearing up for our next presidential election in 2016.  As a taxpayer, if you're thinking about donating to a campaign, what will it mean to you financially? At KYB, we want you prepared. We've compiled a list of campaign-style organizations that candidates may use in their political sprint to the American presidency. 

According to PBS News Hour, campaigns are limited in the ways and amounts of money that they raise for any election.  For a primary election, a campaign is limited to $2,700 dollars and allowed another $2,700 for a general election.  

Beyond traditional campaigning, candidates have a variety of ways to gain support and money for their cause. 

1. Political Action Committees (PACS) and Super PACS:
These are groups that spend money to influence the outcome of elections. They are limited in the amount of money they can give to and raise from individuals.  They can advocate for candidates but are not allowed to fund any candidates directly.  In recent years, a new "Super PAC" has formed that can raise unlimited amounts of money, including funds from corporations. The governing aspect of Super PACS is that they are not allowed to coordinate with any candidate or campaign that they support. 

2. 527 organization:
Similar to Super PACS, a 527 organization can also raise unlimited amounts of money and are not allowed to expressly tell voters how to vote or give money directly to candidates. 

3. 501(c)3: 
A 501(c)3 group is allowed to communicate to voters about a candidate's position on issues; ultimately, trying to influence their decision. However, they are not allowed to tell voters how to cast their ballots or to give money to candidates.  These types of campaigns are tax-exempt non-profits and are considered to be "charities." An example of this would be the Humane Society. 

4. 501(c)4:
Also tax-exempt, this group does not influence elections.  Their mission is to educate people on current political campaign issues.  They can raise and spend unlimited amounts of money, but voters are not allowed to know who donated to their cause. 

Interested in donating but not sure if your political campaign contributions are tax deductible? Unlike charitable donations, which are tax deductible, donations to a political party or PAC are NOT tax deductible. The IRS states, 

"You cannot 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 are not deductible." 

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