The Complete Guide to Tax Credits for a New Roof (2024)
Last Updated: March 05, 2024 • 7 min read
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The tax credit for metal and asphalt roofs was extended for 2023 and 2024, and a solar roof can qualify for the Solar Investment Tax Credit (ITC).
If your roof is old and in need of repair, you may be considering changing your roof. Roofing can be a costly investment, but there are many benefits to be gained from a new roof. Moreover, you might be eligible for tax credits and minimize the replacement costs! A new roof will:
- improve the appearance of your home
- increase the value of your home
- protect your home from the elements
It is essential to consult with a roofing contractor to get an accurate estimate of the cost of a roof replacement or roof repair and to discuss the best options for your home.
Why are Tax Credits Important?
Tax credits can help you save taxes and get back some of the money you have already paid in taxes. The government usually offers them, and they are often used to provide incentives for certain activities.
Tax credits can be applied to anything from a new roof to a new car or even your mortgage. The tax credit is applied when you file your taxes and will reduce your tax liability.
There are several reasons why tax credits are essential. One of the most obvious reasons is that they can help offset the cost of making improvements to your home. For example, if you’re considering replacing an old roof, the tax credit can help offset the cost of the new roof.
Another reason tax credits are important is that they can provide benefits beyond financial assistance. For example, tax credits can also help improve your home’s energy efficiency through the selection of solar energy systems, solar roofing tiles, or other energy-efficient options. This can save you money on your energy bills and help reduce your carbon footprint.
Overall, tax credits are important because they can help with the costs of home improvements and provide other benefits. If you’re thinking about making some improvements to your home, check to see if there are any tax credits you could take advantage of.
Tax Credit Eligible Purchases
If you are renovating or improving your personal home, it won’t be eligible for tax credits. There are two cases where tax credits can be applied.
First, if the improvement is regarding energy efficiency, for instance, if you’re switching to a more efficient kind of energy while improving your home.
Second, if you have a medical condition for which you need home improvement. For instance, sometimes doctors suggest building a swimming pool or something to help the patient. In those cases, you might not have to file taxes or even receive credits.
Therefore, the tax credit for home improvements is available only to purchase qualifying items. You can subtract the money for a new roof or any other eligible expense on your federal income tax return as a federal tax credit for the tax year.
This is a great way to make your home more energy efficient, which will help lower your monthly bills and reduce your carbon footprint. You can also find out if you are eligible by filling out the IRS form.
Re-roofing Your Home? Know If You’re Eligible for Tax Credit
If you want to replace your home’s roof, you should know that tax credits might be available to help with the cost. The government has a list of requirements to qualify for the credit. Here are a few roof products to look into installation costs, tax benefits, and feasibility.
Metal Roof
According to the government, you are eligible for a tax credit if you use a material that reflects maximum sunlight and saves energy. If you use a material that reflects sunlight, your house will be cool. Therefore, you won’t need air conditioning. So, materials that can help reduce energy use or shift into sustainable energy forms are eligible.
The government suggests metal roofs with a pigmented coating to reduce heat and thus energy consumption. This means there are better metal roof colors than others. The material you use must be ENERGY STAR certified and installed on your principal residence. It’s a standard the government has set for eligibility.
Asphalt Roof
Another criterion for eligibility is an asphalt roof with cooling granules. It would be best to use asphalt shingles, which have specific cooling granules to keep the house cool.
Asphalt roofs with cooling granules are energy efficient because they reflect heat back into the atmosphere instead of absorbing it into the building. This helps keep the building cooler in the summer, reducing the need for air conditioning and lowering energy bills. In addition, the granules also protect the roof from UV damage, which can cause the roof to deteriorate over time. This results in a lower roof surface temperature, as well as provides a great structural function.
Therefore, the government has made it eligible for tax credits or deductions because there is less heat gain, the amount of heat is less, and you will be running your AC less and need less energy from the grid.
Solar Roof
No, I don't mean solar panels. There are solar tax credits but we can focus on that some other time. I'm talking about solar roof shingles. These are an option to receive the solar tax credits for roofing material. This is a win-win situation because you can most likely get some state tax credits, which will result in a tax deduction from your installation of a solar roof on your primary residence. Don't even mention the federal solar tax credit that will also reduce your federal taxes, and bump up your tax refund.
Who is Eligible for Tax Credits?
If you are a homeowner looking for tax credits to cover the cost of a new roof, you will be happy to know that some help is available. Currently, a few tax credits can help homeowners with their new roof costs.
- Install a solar roof to take advantage of the energy tax credit, and receive a much-needed tax break.
- Install a metal or asphalt roof with the required pigmented coating or cooling granules.
How Do I Claim My Tax Credit?
The tax credit is a federal government program that helps households offset the cost of their new roof or solar system installation. The tax credit amount varies depending on what was installed, and how much was paid for it, among other things.
To claim your tax credit, you must meet the requirements listed above and fill out IRS Form 5695.
Final Thoughts
The Internal Revenue Service is a federal department responsible for collecting taxes and enforcing tax laws in the United States. The IRS offers many different types of taxpayer assistance, including:
- Taxpayer education and outreach programs
- Free tax help from IRS-certified volunteers
- Toll-free telephone service
- Online tools, forms, and information about topics like taxes, health care, retirement, and more
The IRS also has a Taxpayer Advocate Service (TAS), which is their customer service arm that handles individual taxpayer issues. The TAS provides one point of contact for individuals unable to resolve their issues through normal channels. Moreover, the government offers tax credits for re-roofing if you are eligible.
Before making a large purchase for structural components like solar roofing shingles, please consult with your tax professional for tax advice.