To amend the Internal Revenue Code of 1986 to provide a credit and a deduction for small political contributions.

Summary: Citizen Involvement in Campaigns Act of 2005 - Amends the Internal Revenue Code to allow: (1) a $200 tax credit ($400 for joint returns) for contributions to a candidate for Federal elective public office or to the national committee of a national political party; and (2) a tax deduction (available to taxpayers who do not itemize deductions) for such political contributions up to $600 ($1,200 for joint returns).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Citizen Involvement in Campaigns Act 
of 2005''.

SEC. 2. TAX CREDIT FOR CERTAIN POLITICAL CONTRIBUTIONS.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25B the 
following new section:

``SEC. 25C. CREDIT FOR CERTAIN POLITICAL CONTRIBUTIONS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to all qualified political contributions 
paid by the taxpayer during the taxable year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed by subsection (a) 
        shall not exceed $200 ($400 in the case of a joint return).
            ``(2) Verification.--The credit allowed by subsection (a) 
        shall be allowed with respect to any qualified political 
        contribution only if such contribution is verified in such 
        manner as the Secretary shall prescribe by regulation.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified political contribution.--The term 
        `qualified political contribution' means a contribution or gift 
        of money, or the fair market value of a contribution or gift of 
        property, to--
                    ``(A) an individual who is a candidate for 
                nomination or election to any Federal elective public 
                office in any primary, general, or special election, 
                for use by such individual to further the candidacy of 
                the individual for nomination or election to such 
                office, or
                    ``(B) the national committee of a national 
                political party.
            ``(2) Candidate.--The term `candidate' means, with respect 
        to any Federal elective public office, an individual who--
                    ``(A) publicly announces before the close of the 
                calendar year following the calendar year in which the 
                political contribution is made that the individual is a 
                candidate for nomination or election to such office; 
                and
                    ``(B) meets the qualifications prescribed by law to 
                hold such office.
            ``(3) National political party.--The term `national 
        political party' means--
                    ``(A) in the case of qualified political 
                contributions made during a taxable year of the 
                taxpayer in which the electors of President and Vice 
                President are chosen, a political party presenting 
                candidates or electors for such offices on the official 
                election ballot of ten or more States; or
                    ``(B) in the case of qualified political 
                contributions made during any other taxable year of the 
                taxpayer, a political party which met the 
                qualifications described in subparagraph (A) in the 
                last preceding election of a President and Vice 
                President.
    ``(d) Election not to Have Section Apply.--A taxpayer may elect not 
to have this section apply with respect to qualified political 
contributions made during the taxable year.
    ``(e) Cross References.--

``For transfer of appreciated property to a political organization, see 
                            section 84.
``For certain indirect contributions to political parties, see section 
                            276.''.
    (b) Conforming Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of such Code (relating to 
nonrefundable personal credits) is amended by inserting after the item 
relating to section 25B the following new item:

``Sec. 25C. Credit for certain political contributions.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31 of the calendar year 
in which this Act is enacted.

SEC. 3. DEDUCTION FOR CERTAIN POLITICAL CONTRIBUTIONS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by redesignating section 224 
as section 225 and by inserting after section 223 the following new 
section:

``SEC. 224. POLITICAL CONTRIBUTIONS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction for the taxable year an amount equal to the 
qualified political contributions made by the taxpayer during the 
taxable year.
    ``(b) Limitation.--The amount allowed as a deduction under 
subsection (a) for the taxable year shall not exceed $600 ($1200 in the 
case of a joint return).
    ``(c) Qualified Political Contribution.--For purposes of this 
section, the term `qualified political contribution' shall have the 
meaning given such term by section 25C(c)(1).
    ``(d) Denial of Double Benefit.--No deduction shall be allowed 
under subsection (a) to a taxpayer for any qualified political 
contribution made during the taxable year if a credit is allowed to 
such taxpayer under section 25C for such year.''.
    (b) Deduction Allowed Whether or not Taxpayer Itemizes Other 
Deductions.--Subsection (a) of section 62 of such Code is amended by 
inserting before the last sentence at the end the following new 
paragraph:
            ``(21) Qualified political contributions.--The deduction 
        allowed by section 224.''.
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by redesignating the 
item relating to section 224 as an item relating to section 225 and by 
inserting before such item the following new item:

``Sec. 224. Political contributions.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31 of the calendar year 
in which this Act is enacted.