My five year old daughter negotiated $20 in back allowance (we hadn't paid her allowance in a while, and she's a better negotiator than me) and then donated that money at her school to a charity for sick children. Assuming the charity is qualified, do I deduct the contribution from my own taxable income? Or is the allowance payment considered a gift or income to her, and so she would deduct it on her own tax return if she had one?
No, you may not deduct the charitable contributions of your children. The Nest covers this in detail:
Now, had you constructed the transaction differently, it's possible you could've made the contribution in your child's name and thus claimed the deduction. Allowance is technically a gift, and if she agrees to forgo allowance in exchange for you making a contribution, well, the IRS can't really complain (though they might try if it were a large amount!). Contributions in the name of someone else, but funded by yourself, are deductible: