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The IRS is very clear about whether you can deduct political campaign contributions from your Federal income taxes: The answer is a stone cold NO. But when it comes to individual states, that’s not the whole story.
While no state lets you deduct political contributions, four of them—Arkansas, Ohio, Oregon, and Virginia—actually do something better: They offer a tax credit for part or all of your contribution, up to a certain amount.
The idea behind the credit is to encourage a wider range of of people to participate in the political donation process, which is largely driven by affluent, conservative Americans, according to the Poverty Action Lab.
The credits, which previously were also offered in Arizona and Minnesota, have been controversial. In Oregon, for example, critics have complained that they cost the state around $7 million in the last election cycle and encourage PACs to solicit donations with come-ons promising that “your gift may cost you nothing.”
But for now, at least, here’s how to take advantage of the credit if you live in one of these states.
“The Natural State” grants tax credits for state—not federal—campaign contributions of up to $50 for an individual ($100 for a couple), and it can be spread over multiple candidates, political action committees approved by Arkansas, and parties.
Like Arkansas, Ohio only allows for contributions to candidates in statewide elections. There is no disqualifying income limit, so the credit is available to anyone who wants a free $50 to donate to someone running for the following offices: governor, lieutenant governor, secretary of state, state auditor, treasurer, attorney general, member of the state board of education, justice of the supreme court, or member of the general assembly. Married couples filing jointly can claim a $100 credit.
If you make less than $200,000 jointly, or $100,000 individually, you can claim a tax credit of $100 and $50, respectively. The state is very open about where you can donate: Political action committees and individual candidates in local, state, and federal elections are all fair game, as long as they’re on a ballot in the state during that tax year.
Old Dominion’s rules apply to all income brackets. According to the Virginia Tax Schedule CR Instructions, the commonwealth will give you a tax credit of 50% of your contribution to a candidate running for state or local office only, with a limit of $25 for individuals, $50 for joint filers.