Political Contributions: Are They Deductible or Not?
By Teresa Ambord
This being an election year, political contributions are a hot topic. Anyone passionate about their candidate, party, or issue might donate a few dollars or a few thousand. And once you do, you can scarcely get through a day without a solicitation of some kind, through your mail, your telephone, or your email.
Is My Contribution Tax -Deductible?
Unlike many other contributions, gifts to political parties and candidates are not deductible. This may seem a little odd, since political organizations are usually tax-exempt. Why the difference? The reasoning is rooted in history, which maintains that the United States Treasury should be neutral in political affairs. If donations to political parties were tax deductible, the effect would be to decrease federal tax revenue, thereby causing the funding of political campaigns to be paid out of public monies. It may sound a little vague, but it does make sense.
Churches and Politics
Similarly, other tax-exempt organizations such as churches are prohibited from taking political stands. Of course, in campaign years it is not uncommon to hear of candidates stumping from behind a church pulpit. But churches that permit this practice are in danger of losing their tax-exempt status if they are challenged.
What About Issue Organizations?
As politics becomes more polarized, certain issues become nearly inseparable from a political affiliation. Yet donations to some of those charities may be deductible. The answer lies in what the activities of that organization are. If the group exists mainly to lobby, donations to them are not tax-deductible. If they exist to provide assistance, donations to them probably do meet the deductibility test.
For example, contributions to a home for unwed mothers that, by its nature, discourages abortion, would qualify, just as a low-income clinic that provides abortions to poor women would qualify. On the other hand, an organization whose chief purpose is to either fight or promote abortion would not. Organizations that do both fall under a different category altogether.
When In Doubt...
If an organization assures you that contributions to them are tax-deductible but you suspect that, by their nature, they would be considered a political institution, here are a few actions you can take:
- Ask to see the Letter of Determination from the IRS. Typically, donaations to organizations with the 501(c)(3) designation are tax deductible, while donations to 501(c)(4) organizations are not.
- Contact the local IRS office, whose number you'll find in your phone book.
- Log onto to Better Business Bureau and provide them with basic information about the charity.
Or...
For any organization seeking donations, you can verify that they are a bona fide charity, if you go to Give.org or call 212-929-6300, ext. 1029. Or you can write to National Charities Information Bureau, 19 Union Square West, Dept. 1029, New York, NY 10003-3395. NCIB has been a reliable source of independent, objective information regarding charities for over 80 years. Contact them for a complimentary copy of their helpful Wise Giving Guide newsletter.
A Simple List Of Deductible Donations...
To see a list of deductible and non-deductible donations, as well as a roster of the most common charities qualified to receive tax-deductible donations, visit: Quicken.
