Take Credit Where Credit is Due

In these waning days of 2017, there’s no shortage of articles recapping what a deeply weird year it has been in the political arena and highlighting that the weirdness is not close to ending. A lot of folks have been more engaged with political activity than ever before, including contributions to candidates, political action committees, and qualified parties. Unlike when you give to charitable organizations, you get no tax deductions for those political contributions. But if you live in Oregon, you might get something even better.

Since we’re in the last days of the year, we think it’s important and timely to highlight an extraordinary opportunity in the Oregon state tax code. I’m talking here about the Oregon Political Contribution Credit. In broad terms, an individual can take up to $50 in political contributions as a credit directly off their Oregon income tax liability. A married couple filing jointly can take $100.

That means with those dollars you can decide right now if you want to pay it to the state in income tax or pay it to a candidate, PAC, or party you want to back. It’s not a deduction, so you don’t have to itemize and it doesn’t reduce your taxable income. It directly reduces your Oregon tax. That’s pretty awesome.

Of course there are some limitations – the most obvious: the contribution has to be made by December 31. The candidate must be on the ballot or have a certificate of nomination filed. Any PACs have to be certified with the state or registered with the Federal Elections Commission. Any minor parties have to be qualified under state law. (Contact the Oregon Secretary of State’s Office in Salem at 503-986-1518 to see if a particular party qualifies.)

Also, you can’t claim this credit if your federal adjusted gross income is over $200,000 for a jointly filed return or over $100,000 on any other type of return. The combination of this income limit and the applicability to all individual taxpayers (whether or not you itemize) makes this one of the most progressive and populist clauses you’re likely to find in tax law anytime soon.

Note: We aren’t giving tax advice here, just highlighting something a lot of people overlook. Either consult with a tax professional or if you’re a DIY person, read up on the details in Publication OR-17 before you try to claim the credit.

And have a Happy New Year!