Federal and California political donation limitations and reporting requirements

With the 2024 elections less than two months away, donors have begun making political contributions. Anyone contributing to a campaign should keep in mind that specific activities that either support or oppose candidates for federal, state and local offices are generally subject to federal and state campaign finance limitations. These limitations generally restrict the sources and amounts of funds that can be used to finance elections. To avoid incurring penalties at both the California and federal levels, donors should evaluate the following guidelines and limitations.

Federal political contribution limits for 2024

Federal contribution limits vary based on the type of donor and the recipient. Some limits are based on the election cycle, while others are based on an annual total.

Individual donors are not required to file campaign reports for federal political contributions.

California major donor reporting

California imposes donor reporting requirements to ensure voters are aware of who is paying for political messages so they may evaluate and make informed decisions when voting. Specifically, California donors who meet the definition of a “major donor committee” (hereinafter referred to as “major donor”) and donate to California political campaigns are required to report their contributions to the California Secretary of State.

For California reporting purposes, a major donor is an individual or entity that makes one or more donations totaling $10,000 or more to political campaigns. A major donor includes any of the following:

• Individual
• Corporation
• Organization
• Business
• Partnership

The $10,000 threshold applies to any of the following types of contributions made in the aggregate in a single calendar year:

• California state and/or local candidates
• Ballot measure committees
• Political action committees (“PAC”)
• Political parties

Note that federal campaign contributions to candidates or national parties are not included in the $10,000 threshold.

California political contribution filing requirements for 2024

Reporting requirements for California political contributions vary based on the year. The reporting due date is dependent on when the donor makes the contribution and there are penalties if the state forms are not filed on time.

For even-numbered years, major donors are required to file a report one or two times during the year. If all your contributions are in one city, you may need to file more frequently.

In odd-numbered years, major donors may need to file up to four times throughout the year, and potentially more if contributions are in one city.

Contributions come in varying forms, including:

• Money (cash, check, credit card, wire transfers)
• Loans (including loan guarantees, co-signing, lines of credit and forgiveness of a loan)
• Tickets to political fundraisers
• In-kind and non-monetary contributions (see below for a non-exclusive list of examples)
• Dues payments allocated to a California PAC
• Enforceable promises

In-kind contributions include hosting events or fundraisers or allowing candidates to use personal or corporate resources such as private planes, company office space or staff time. Discounts on company goods and services also count as in-kind contributions that must be reported by major donors.

Contributions from affiliated individuals and business entities might need to be disclosed in the same major donor report.

Note that some local jurisdictions have their own contribution limits.

Late contribution reports

A late contribution report must be filed by major donors within 24 hours of making contributions totaling $1,000 or more in either of the following scenarios:

• During the 90 days preceding, or on the date of, an election to support or oppose a single candidate or ballot measure committee and the candidate or ballot measure is being voted upon in that election or
• To a state or county political party during the 90 days prior to a state election or on the date of the election.

The late contribution report is considered your first major donor filing if you reach the $10,000 threshold during this time.

Penalties for late or missed filings in California

Late filing penalties are imposed by California’s Secretary of State at a rate of $10 to $20 per day for both required paper and electronic versions. The penalties are only waived under unusual circumstances.

Additionally, the Fair Political Practices Commission may also fine late filers, in an amount that is the greater of either:

• Up to $5,000 per violation
• The amount not reported

Questions? If you or your business has questions about the information above, please reach out to qualified legal counsel.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.