03/01/2005
What's the easiest way to contribute to a charitable cause? Hand over cash and get a receipt for it? Use a credit card? Write a check?
Easier than any of these is writing a check of another kind: in a stroke or two, your "check" on a line on your California tax return, followed by the amount you want to give, is all you have to do to contribute to any of the 13 causes listed on 2004's return.
Just how do these charitable organizations get on the tax forms to accept your contributions, and how do they get ejected from them?
Since 1983, the California Revenue and Taxation Code has allowed "voluntary contribution fund[s] or account[s]" to be placed on tax forms. The process begins with a legislator's bill for each fund or account. When the bill becomes law, the Franchise Tax Board adds the name of the fund/account to the return immediately, if it is so directed by the legislation. Or, since the tax form can't devote unlimited space to these funds/accounts and still have room for tax information and taxpayer figures, by the terms of the law it may have to wait in line until another fund/account moves out.
How is a fund/account ejected from the tax form?
A listed fund/account may remain listed for the number of years--five, for example--stated in the pertinent section of the R&T code, and its sunset date may be extended if legislation to do that is enacted prior to that date. But if that date is not extended, its name disappears from the tax form.
The funds and accounts must also, with few exceptions, bring in a minimum of $250,000 (which figure may be adjusted in subsequent years) in contributions in order to remain listed. If they don't, they're taken off the list whether they've reached their sunset date or not, and the next in line takes its place.
You can find out which funds and accounts are listed by taking a look at Step 10 on Form 540. You might wonder, though, how some of these funds justify your contribution.
The California Military Family Relief Fund, for example, provides financial aid to families of the State's National Guardsmen who have been called to active duty and is under consideration for extension through a bill introduced by Assemblywoman Nicole Parra, who represents the south Central Valley and chairs the Assembly Veterans Affairs Committee. According to a 2004 Democratic Caucus press release, a military family's income can decline by 70 percent when a family member is deployed. A spokesperson for Ms. Parra explains that the Assemblywoman has met with many military families whose only income is the soldier's salary. "Sometimes it only pays the rent," she says, "and there's not enough to put food on the table. It's important to protect the loved ones left behind."
Here are some other examples:
The purpose of the State Children's Trust Fund for the Prevention of Child Abuse is as its name suggests. The California Department of Social Services' web page reports more than 690,000 cases of child abuse and neglect 10 years ago, with continuing cost escalation each year because of resulting school failure, drug addiction, juvenile crime, etc. of abused and neglected children. The fund provides programs for abandoned and drug-exposed babies, school-based services to families of children in danger of abuse and neglect, crisis assistance when signs of abuse exist, and many other services. This fund received $675,559 in check-off contributions through November 2004.
The California Fund for Senior Citizens funds the California Senior Legislature, volunteers who prioritize seniors' requirements and propose legislation relating to health, housing, transportation, etc., for seniors. Contributions to this fund also provide for seniors' adult day health care centers, nutrition centers, long-term care, abuse-prevention programs, and more.
The Rare and Endangered Species Preservation Program, to which $640,747 has been contributed through November 2004, allocates its funds to the Fish and Game Department, in part to support programs for endangered and rare animals and native plant species and related conservation and enhancement programs.
The Firefighters' and Peace Officers' Memorial Funds' contributions are used for constructing and maintaining, respectively, memorials on the State Capitol grounds in honor of firefighters and peace officers killed each year in protecting the public.
The California Missions rely almost exclusively on private donations to restore and repair cracked tiles, faded paintings, earthquake, flood and termite damage, and theft. Missions Foundation monies are designated for use to restore and repair California's missions and their artworks and artifacts. Their contributions totaled $154,707 through November 2004.
You can check pages and links of the Franchise Tax Board's website for further details and information.
From the contributions to these funds, the FTB and Controller are allocated a portion for administrative costs. But although the law allows them 3% and 2%, respectively, the first year, and 2% and 1% the second, the Taxpayer Advocate Bureau of the FTB tells us that they usually don't take the full amount allowed.
Contributions to the check-off funds and accounts are tax-deductible. And, should you forget about your opportunity to contribute in this manner between now and the time you file your return, your tax preparer will probably remind you, as the legislature encourages tax preparers to do.
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