Political Donation and Tax Deduction
Is Political Donation Tax Deduction available? do not assume the answer is yes.
What is a political donation
A political donation is a gift made to, or for the benefit of, a political party, elected member, candidate, group of candidates, or other person or entity including an associated entity or third-party campaigner.
People and entities making political donations are called donors. Those making reportable political donations are called major political donors. The meaning of political donation differs for each political participant type.
Claiming political contributions and gifts
For individuals who make gifts or contributions to political parties and politicians, In some circumstances, your gifts and contributions to political parties and independent candidates and members may be claimed as income tax deductions.
Who can claim?
Individuals:
Your political gifts or contributions need to be made in a personal capacity to be tax-deductible.
Businesses:
Businesses cannot claim deductions for contributions and gifts to political parties, members and candidates including payments incurred in deriving assessable income.
Recipients
The recipient must be one of the following:
- a political party registered under Commonwealth, state or territory legislation
- an independent member of the Commonwealth Parliament, a state parliament, the Legislative Assembly of the Northern Territory or the Legislative Assembly of the Australian Capital Territory
- an independent candidate for the Commonwealth Parliament, a state parliament, the Legislative Assembly of the Northern Territory or the Legislative Assembly of the Australian Capital Territory
What can I claim?
Your contribution or gift must be $2 or more and be either:
- money
- property that they purchased during the 12 months before making the contribution or gift.
Under a will
You can’t claim a deduction for contributions and gifts made under a will.
Tax Loss
A deduction for a contribution or gift cannot add to or create a tax loss.
Membership of registered political parties
If you pay a membership subscription to a registered political party, you can claim it as a tax deduction.
Giving to independent candidates and members
If you make a contribution or gift to an independent candidate in an election you must make the contribution after the candidates for the election are officially declared or announced and before either:
- the candidate withdraws
- the election result is officially declared or announced.
If you make a contribution or gift to an independent member, the contribution or gift must be made during their term of office.
What is an independent candidate?
An independent candidate is not endorsed by a political party registered under the Commonwealth Electoral Act 1918 or under corresponding state or territory electoral legislation. The term includes an endorsed candidate of an unregistered political party.
An independent member is not a member of a political party that is registered under Part XI of the Commonwealth Electoral Act 1918 or under corresponding state or territory legislation.
The term includes a member of an unregistered political party.
How much can I claim?
You need to claim your tax deduction for a political contribution or gift in the income year you made the contribution or gift.
The most you can claim in an income year is:
- $1,500 for contributions and gifts to political parties
- $1,500 for contributions and gifts to independent candidates and members.
The amount of the deduction for a contribution or gift of property is either the market value of the property on the day the contribution or gift was made or the amount the individual paid for the property, whichever is less.
Political donations in the form of cash over $100
It is unlawful for a person to make or accept a political donation in the form of cash over $100.
Political donations in the form of cash over $100 must be made electronically or by cheque.
This type of unlawful political donation is in effect from 1 January 2020.
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