275

How to Take Advantage of Federal Tax Credits for Roof Replacement

While the federal energy efficiency tax credits motivate many homeowners to upgrade to energy efficient heating and cooling systems, windows and doors, water heaters, or home appliances, very few are aware that the savings also apply when replacing a roof.

Up to $500 can be taken as a federal tax credit, so its requirements are worth considering when your home needs a new roof. The process for taking advantage of the federal tax credit for roof replacement is quick and straightforward.

Select energy efficient roofing materials

The consumer energy efficiency tax credit applies to replacement roofs that are made from materials proven to reflect a large amount of heat from the sun’s rays. Roofing materials that qualify are:


  • Asphalt roof shingles that are coated with the required cooling granules;
  • Metal roofing containing applicable pigmented coatings for reducing heat buildup;
  • Solar reflecting roofing.


The U.S. Energy Star program designated these roofing materials as energy efficient because they reduce the temperature of the roof’s surface by as much as 100 degrees. By lowering the amount of roof heat that transfers into the home, less energy is used to cool it. Besides earning the tax credit, homeowners also reduce their energy bills because they’ve decreased usage of air conditioners or their cooling system.

TIP: Your roofing company can assist you with selecting roofing materials that qualify for the tax credit.

Schedule your roof replacement

Currently, the home energy efficiency tax credit is applicable through December 2013. As long as your replacement roof is in place by the end of the year, you can get the savings. If you miss the deadline, it’s possible the U.S. Congress may renew the tax credit for 2014 and beyond. The energy efficiency tax credit, which was first introduced in 2005, has been extended several times starting in 2008.

TIP: If you already installed a replacement roof in a previous year and were unaware of or didn’t apply for the residential energy credit, you can amend your tax form as far back as three years from the filing year. (Example: You have until April 2014 to amend your 2010 return that you filed in 2011). You’ll need forms 1040X and Form 5695 for the year you are amending.

Obtain the necessary documentation

Once your new energy efficient roof is installed, some paperwork is needed to document that the replacement roof meets the Energy Star requirements. Here’s what to obtain:


  • A manufacturer’s certification statement that states the roof is certified for the residential energy credit. The roofing company that installed the roof should be able to obtain this for you or tell you how to request it from the roofing materials manufacturer.
  • A receipt that outlines how much you paid for the replacement roof, with materials, installation and labor costs listed separately.


TIP: This documentation should be retained for seven years in case the IRS requires it.

Claim your tax credit

Under the American Payer Relief Act of 2012, the federal energy tax credit for roofing under IRS Section 25c is 10% of the cost of building materials, up to $500.

When filing your taxes, simply attach the current IRS tax form 5695 to apply for the residential energy efficient property credit.

Going green with your roof is an option that delivers savings all around. The U.S. government tax credits reward homeowners for being environmentally conscious, plus utility bills deliver substantial savings for lower energy consumption. That makes rooftop energy efficiency a win-win for you and the environment.

Author Biography:
Chad Janisch is a 10-year roofing industry veteran and owner of the Roofing Annex, a Cincinnati, Ohio roofing company.

Credit: RenovateYourWorld.com