Eleanor Finch
Campaign political checkoff is a system that allows taxpayers to contribute a small amount of money from their taxes to help fund election campaigns. The funds are used to support eligible candidates running for office, with the aim of reducing the financial burden on candidates and promoting fair and transparent elections. The checkoff amount does not affect the taxpayer's refund or tax liability. This system provides an opportunity for citizens to directly engage in the political process and support their preferred candidates or parties. The introduction of campaign political checkoff has been subject to various regulations and eligibility criteria, with the specifics varying across different states and levels of elections.
Characteristics and Values of Campaign Political Checkoff
| Characteristics | Values |
|---|---|
| Nature of the Fund | The campaign fund is a source of money for eligible candidates during elections. |
| Source of the Fund | The fund is sourced from taxpayers who voluntarily check off a box on their tax forms to contribute a designated amount to the fund. |
| Eligibility for Funding | Only candidates seeking nomination by a political party for the office of president are eligible for funding. |
| Eligibility Requirements | Candidates must establish broad-based public support by raising a minimum amount of funds ($5,000) in each of at least 20 states. |
| Matching Funds | The federal government will match up to $250 of an individual's total contributions to an eligible candidate. |
| Spending Limits | Candidates receiving public funds must limit their spending to the amount of the grant and cannot accept private contributions. They may spend additional personal funds, but these are subject to limits. |
| Fund Amount | The amount varies and is determined by factors such as the number of taxpayers contributing and the rate of inflation. In 2007, the grant amount was $81.78 million, and in 2024, it is $123.5 million. |
| Use of Leftover Funds | Leftover funds from the campaign cannot be used for personal expenses. They can be donated to charities, other candidates, or saved for future campaigns. |
| Fund Diversion | In 2014, the Gabriella Miller Kids First Research Act diverted funds from political conventions to pediatric cancer research. |
| Tax Implications | Checking off the box to contribute does not change the amount of an individual's tax or refund. |
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What You'll Learn
Taxpayer contribution
Taxpayers in the United States have the option to contribute a portion of their taxes to the Presidential Election Campaign Fund. This is done through a designated box on the 1040 federal income tax form, where taxpayers can choose to allocate $3 of their taxes to the fund. This contribution does not increase the amount of tax owed or decrease any refund entitled to the taxpayer. The fund is used to provide financial support to candidates seeking nomination by a political party for the office of President. To be eligible for this funding, candidates must demonstrate broad-based public support by raising at least $5,000 in each of a minimum of 20 states. The Federal Election Commission (FEC) determines eligibility and certifies the amount of public funds a candidate is entitled to receive.
In addition to the Presidential Election Campaign Fund, taxpayers in Minnesota have a similar option on their income tax and property tax return forms. They can choose to designate $5 (or two separate $5 amounts for spouses filing jointly) to go to a recognised political party of their choice. This contribution is then deposited into the State Elections Campaign Fund, and distributed to the qualifying candidates from each party. Similar to the federal fund, this contribution does not affect the taxpayer's refund or tax owed.
The participation rate in these programs has varied over time. For the Presidential Election Campaign Fund, about 29% of taxpayers contributed in 1977, which dropped to 19% by 1992 and further declined to 3.6% in 2020. This decrease has been attributed to factors such as an increase in the contribution amount from $1 to $3 in 1994, a lack of understanding of the fund, and apathy towards the political duopoly.
It is important to note that these taxpayer contributions are voluntary and do not change the amount of an individual's tax liability or refund. They provide a way for taxpayers to support the election campaigns of candidates seeking office, ensuring that candidates have the financial resources to run for office without relying solely on private contributions or personal funds.
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Eligibility requirements
To be eligible to receive public funds, the candidate must limit spending to the amount of the grant and cannot accept private contributions for the campaign. Presidential candidates must establish eligibility by showing broad-based public support and raising more than $5,000 in each of at least 20 states (that is, over $100,000). The federal government will match up to $250 of an individual's total contributions to an eligible candidate. Only candidates seeking nomination by a political party to the office of president are eligible to receive primary matching funds.
In Minnesota, all parties that have met the statutory requirements to be recognised as a Minnesota political party are listed on the tax return forms. The Board is responsible for ensuring that only qualified candidates receive public subsidy money.
The campaign finance law exempts the payment of some expenses from the spending limits. Certain fundraising expenses (up to 20% of the expenditure limit) and legal and accounting expenses incurred solely to ensure the campaign's compliance with the law do not count against the expenditure limits. Candidates may spend an additional $50,000 from their own personal funds, which does not count against the expenditure limit.
After the conventions, candidates can raise funds for general election legal and accounting compliance funds (GELACs), which are to be used exclusively to pay for legal and accounting expenses for the campaign. They can also pay for recounts, as this is considered a "winding down" expense allowed under regulations.
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Public funding
The public funding program provides money to eligible candidates to pay for qualified expenses of their political campaigns in both the primary and general elections. To be eligible for funding, candidates must agree to an overall spending limit, abide by spending limits in each state, use public funds only for legitimate campaign-related expenses, keep financial records, and permit an extensive campaign audit. The spending limits vary by state and increase each cycle due to inflation. Certain expenses, such as fundraising and legal and accounting expenses, are exempt from the spending limits.
Some states, such as Minnesota, also have their own tax checkoff programs for political campaigns. On their income tax and property tax return forms, taxpayers can designate a certain amount (usually $5) to go to a particular political party's State Elections Campaign Fund. The money is then distributed to the state units of each recognized political party and to the campaign committees of qualifying candidates from each party.
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Campaign spending limits
The Presidential Election Campaign Fund is a source of public funding for major party presidential nominees in the general election. The fund provides a grant to eligible candidates, who must agree to limit their campaign spending to the amount of the grant and refrain from accepting private contributions. For instance, in 2024, the general election grant is set at $123.5 million, which serves as the spending limit for candidates receiving this public funding.
In addition to public funding, campaign spending can also be financed through private donations and contributions from political action committees (PACs). Candidates may collect millions of dollars in contributions to cover campaign expenses. However, it is important to note that there are regulations in place, such as those outlined by the Federal Election Commission, that govern how this money can be spent and any remaining funds after the campaign concludes.
These regulations aim to prevent personal use of campaign funds and ensure that any leftover money is used appropriately. Permitted uses of leftover funds include charitable donations, donations to other candidates, or saving it for future campaigns. It is worth noting that the rules may differ for specific types of PACs, such as super PACs, which have more flexibility in how they utilise their funds after a candidate drops out or an election concludes.
While the campaign spending limits can vary based on various factors, including inflation and the number of voting-age individuals in a state, it is crucial for candidates and their campaign teams to adhere to the established limits and regulations to ensure fair and transparent election processes.
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Post-campaign fund usage
Once the election is over, there are rules in place for how the remaining campaign funds can be used. Candidates are not allowed to use any remaining funds for personal use after all campaign-related debts are settled. Personal use is defined as an expense that would exist independent of the campaign, such as salary payments to the candidate's family unless they provide a bona fide service to the campaign and the payment reflects the value of the service in the free market.
Leftover campaign funds can be used for charitable donations, or they can be donated to other candidates. Candidates can also create a leadership PAC to back other candidates and a political agenda, although critics argue that these can be used as slush funds due to the lack of restrictions on this kind of spending. If a candidate receives contributions for a general election but drops out of the race or loses the primary race, contributions must be refunded to individual donors within 60 days. Alternatively, the candidate can redistribute their general election funds with the contributor's permission.
Super PACs have fewer restrictions on how they can use leftover funds. They can continue to use the money to support the same or another federal candidate in future elections, or donate to other organizations aligned with their political cause. Although not legally required, Super PACs often return leftover funds to donors.
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Frequently asked questions
It is a way for taxpayers to contribute a small amount of money to a political campaign fund without increasing the amount of tax they owe or decreasing any refund they are entitled to.
Taxpayers can choose to check a box on their tax form to contribute a set amount of money to a particular political party or fund. This money is then used to pay for the party's campaign expenses.
The amount varies depending on the location and the specific fund. For example, in Minnesota, taxpayers can designate $5 to go to a political party of their choice. For the Presidential Election Campaign Fund, taxpayers can contribute $3.
Yes, only qualified candidates are eligible to receive public subsidy money. For the Presidential Election Campaign Fund, only candidates seeking nomination by a political party for the office of president are eligible to receive primary matching funds. They must also establish eligibility by raising a minimum amount of money in each of at least 20 states.
Leftover campaign funds must be used to pay off campaign debts or can be donated to charities or other candidates. Personal use of leftover campaign funds is prohibited.
