Explore tax rules and limits of political donations in light of the 2024 presidential race.
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As the 2024 presidential election draws nearer, a notable trend is reshaping the campaign: a dramatic increase in political donations, many from first-time donors.
For example, shortly after President Biden's surprise withdrawal from the 2024 presidential race last month, he endorsed Vice President Kamala Harris for the Democratic nomination. Within hours, the Harris campaign amassed nearly $50 million in small-dollar donations through the online fundraising platform ActBlue. (Data show that fundraising day was the most successful for the site and donations reached $81 million in the first 24 hours.)
Following the Democratic National Convention in late August, the Harris Campaign reportedly raised more than 500 million dollars.
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Additionally, after former President Trump was convicted on 34 felony counts, his campaign experienced a surge in donations, raising about $52.8 million in the hours following the verdict.
Later, in July, the Trump campaign reported raising about $137 million.
These instances show that fundraising surges aren't necessarily confined to one candidate or political party. Instead, recent events highlight a broader phenomenon where voters are increasingly willing to contribute financially to candidates they believe in.
But for some, massive fundraising hauls for various candidates raise another key financial question: Are political donations tax deductible?
Regardless of the amount or the recipient, the IRS says money given to political causes cannot be deducted from your federal tax return. This applies to contributions made to individual candidates, political parties, campaign committees, political action committees (PACs), or any organization that seeks to influence legislation or elections.
So, this rule applies whether political contributions are large or small, and to various types of donations including but not limited to:
Whether you are donating money, goods, or services to a political cause, none can be claimed as tax deductions.
It's important, however, to distinguish between political contributions and charitable donations.
Charitable donations typically refer to gifts made to organizations that qualify under Section 501(c)(3) of the Internal Revenue Code. As you may know, many charitable donations are tax-deductible.
Note: If you are volunteering for a political campaign, expenses incurred while volunteering for the campaign are not tax-deductible. This includes out-of-pocket costs for supplies, transportation, or any other expenses related to campaign activities. The value of your time or services provided to a political campaign is also not deductible.
Companies cannot deduct political donations, including in-kind contributions or advertisements in political convention bulletins, on their tax returns.
It's worth noting that while political contributions are not tax-deductible, they are still subject to certain regulations and reporting requirements. The Federal Election Commission (FEC) limits how much individuals can contribute to federal candidates and political committees.
For this election cycle, the donation limit to a candidate is $3,300 per election, per candidate. Contributions to a PAC are limited to $5,000 per year.
If you are giving to a state district or local party committee, the limit is $10,000 per year, and for contributions to a national party committee, the limit is $41,300 per year.
Whether you're considering a small-dollar donation or a larger contribution for the upcoming election, your political contributions, while likely impactful for your favorite candidate's campaign, will not reduce your federal tax liability.
As always, for specific questions about your tax situation, it's good to consult with a qualified tax professional.
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Senior Tax Editor, Kiplinger.comAs the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.
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