(a)

1. (1) A credit against Arkansas individual income tax will be allowed for political contributions made by a taxpayer.
2. (2) The allowable credit will reduce a taxpayer’s income tax liability on a dollar-for-dollar basis.

(b) All of the following criteria must be satisfied in order for the credit to be properly taken:

1. (1) The contribution can be made to only one (1) or more of the following:

   1. (A) A candidate seeking nomination or election to a public office at an election, or to the candidate’s campaign committee;
   2. (B) A small donor political action committee;
   3. (C) An approved political action committee; or
   4. (D) An organized political party;

2. (2)

   1. (A) The credit can be claimed only for the tax year in which the contribution was actually made.
   2. (B) The credit cannot be carried back or forward.
   3. (C)

(i) The credit is also nonrefundable.

1. (ii) The term “nonrefundable” means that any credit in excess of the actual tax liability will not be refunded to the taxpayer or carried forward in any manner;

2. (3)

   1. (A) The maximum amount of credit that can be claimed for any given tax year is fifty dollars ($50.00) per individual return (i.e., filing single) and one hundred dollars ($100) per joint return, despite the fact that the taxpayer or taxpayers may have actually contributed more than these maximum amounts.

   2. (B)

      1. (i) The maximum amount of credit allowable per tax year for a contribution or contributions to any single small donor political action committee is twenty-five dollars ($25.00) (filing single) and fifty dollars ($50.00) (filing jointly).
      2. (ii) No credit will be allowed for any amount donated to any single small donor political action committee that exceeds the cap of twenty-five dollars ($25.00) per person per year;

3. (4)

   1. (A) The credit may be claimed only on Arkansas individual income tax returns and not on any other type of income tax return.

   2. (B) For example, the credit could not be claimed on the following types of income tax returns:

      1. (i) Corporation;
      2. (ii) Subchapter S;
      3. (iii) Partnership; and
      4. (iv) Fiduciary;

4. (5)

   1. (A) The contribution must be in the form of money.

   2. (B) “Money” means:

      1. (i) Cash (currency and coins);
      2. (ii) Money orders; and
      3. (iii) Negotiable checks; and

5. (6)

   1. (A) The taxpayer shall provide the amount of each political contribution and the person or entity to whom each such political contribution was made during the tax year.

   2. (B)

      1. (i) This information shall be provided on a form issued by the Department of Finance and Administration.
      2. (ii) The sum total of all contributions shall be calculated by the taxpayer and the appropriate amount of credit should then be entered on the designated line in the tax credits section of the Arkansas individual income tax return.
      3. (iii) The completed tax credit form should be attached by the taxpayer to the backside of the Arkansas individual income tax return.