Upgrading your roof is a significant investment that can enhance your home’s energy efficiency and potentially lower your roof tax credit.
Certain energy-efficient roofing materials may qualify for federal tax credits, helping you save on taxes while enhancing your home’s durability and efficiency. Understanding these roof tax credits can help you maximize your savings and ensure compliance with IRS requirements.
Disclaimer: Consult a Tax Professional
The information in this article is for general guidance only and should not be considered tax advice. Tax laws change frequently, and eligibility for credits may vary based on individual circumstances. Homeowners should consult a qualified tax professional to determine their specific eligibility and ensure compliance with IRS regulations.
Understanding Roof Tax Credits
A tax credit directly reduces the amount of taxes owed, making it more valuable than a deduction, which only reduces taxable income.
Homeowners who install qualified energy-efficient roofing materials may be eligible for federal tax credits under the Inflation Reduction Act (IRA), which extends the Energy Efficient Home Improvement Credit through 2032.
The Energy Efficient Home Improvement Credit allows homeowners to claim 30% of eligible improvement costs, with annual limits up to $1,200 for certain home upgrades and an additional potential savings of $2,000 per year for heat pumps, heat pump water heaters, and biomass stoves/boilers, reaching a potential total of $3,200 per year if one of these additional upgrades is also installed.
Both material and qualified installation costs can be included in this calculation. It is important to note these limits are per calendar year, and not lifetime limits.
Are There Florida-Specific Incentives?
Florida does not currently offer a statewide tax credit specifically for new roofs.
However, homeowners may find rebates or local incentives through energy companies or municipal programs. For example, Florida Power & Light (FPL) offers various energy efficiency programs.
Additionally, Florida’s Property Assessed Clean Energy (PACE) program provides financing options for energy-efficient home improvements.
Please be aware that PACE financing creates a lien on your property that takes priority over your mortgage, which may create complications when selling or refinancing your home. If the PACE loan is not repaid, the homeowner could face foreclosure. It’s essential to understand these and other potential risks and benefits before committing.
Eligibility for a Roof Tax Credit
Not all roof replacements qualify for tax credits. The IRS has specific guidelines regarding eligible roofing materials, homeownership status, and installation requirements that can help you decide if your roof is tax deductible.
Qualifying Roofing Materials
To qualify for the credit, certain property must meet specific energy efficiency requirements.
The IRS typically requires roofing products that meet ENERGY STAR® standards, which help reduce energy consumption by reflecting more sunlight and reducing heat absorption.
Examples of qualifying materials include:
- Metal roofing with appropriate pigmented coatings (typical SRI value: 50-90)
- Asphalt shingles with specialized cooling granules (typical SRI value: 20-40)
- “Cool roofs” with reflective coatings or membranes (typical SRI value: 60-110)
- Clay or concrete tile with reflective properties (typical SRI value: 40-80)
Important Note: The SRI values listed above are typical values and actual values can vary significantly between products. Always rely on the manufacturer’s documentation for the specific SRI value of your chosen roofing material.
Check the ENERGY STAR Roof Products Database to verify eligibility.
Homeowner Requirements
- The home must be your primary residence; rental properties typically do not qualify. For the Residential Clean Energy Credit (Section 25D), some second homes may qualify for certain improvements (e.g., solar panels), but this generally doesn’t apply to roofing.
- The installation must be completed within the qualifying tax year.
- The roof upgrade must be an improvement, not a repair. For example, a full roof replacement is an improvement, while patching a few shingles is a repair.
Step-by-Step Guide to Claiming the Credit
Homeowners must follow specific steps when claiming a roof tax credit to ensure compliance with IRS requirements.
Step 1: Confirm Your Roof Meets Energy-Efficient Requirements
Before replacing your roof, verify that the roofing materials qualify for the tax credit.
The manufacturer should provide certification statements indicating that the product meets IRS energy-efficiency standards. This certification should explicitly state that the product meets the applicable ENERGY STAR® requirements.
Step 2: Keep All Necessary Documentation
The IRS requires homeowners to maintain records of:
- Receipts and invoices from the roofing contractor (itemizing materials and installation costs)
- Manufacturer certification statements proving the product meets tax credit requirements
- Proof of installation (a contract or completion certificate)
- Home improvement permits and inspection certificates
Keeping these records is essential in case of an audit. Failure to provide proper documentation can result in the loss of the credit.
Step 3: Complete IRS Form 5695
To claim the tax credit, homeowners must file IRS Form 5695 (Residential Energy Credits) along with their federal tax return. This form calculates the total credit amount based on qualifying home improvements. The specific line numbers and instructions may change annually, so be sure to download the most current version from the IRS website.
Step 4: File with Your Annual Tax Return
The completed Form 5695 should be submitted with your Form 1040 tax return for the applicable year. The credit amount is applied directly to your tax liability, reducing the amount owed.
How Much Can You Save?
The Energy Efficient Home Improvement Credit covers 30% of the qualifying costs (both materials and professional installation), but the maximum total credit for all qualifying home improvements is $1,200 per year.
Example Calculation:
If the energy-efficient portion of your roof installation costs $4,000 (including both materials and qualified labor), the potential credit would be:
$4,000 x 30% = $1,200 tax credit
However, if additional qualifying upgrades (such as insulation or energy-efficient windows) were installed the same year, the combined total cannot exceed $1,200 annually for standard home improvements.
Common Mistakes to Avoid
Mistakes can delay or disqualify a tax credit claim. Homeowners should watch out for these common errors:
- Assuming all roofing materials qualify – Only energy-efficient coatings and materials are eligible.
- Forgetting to obtain manufacturer certification – The IRS requires proof that the roofing material meets efficiency standards.
- Failing to keep receipts and documentation – The IRS may request proof of purchase and installation.
- Not separating material and labor costs in documentation – Both may qualify, but should be clearly itemized.
- Applying for the credit on a second home – The credit is typically only available for primary residences.
- Missing filing deadlines – Credits must be claimed for the tax year in which installation was completed.
Stronghold Roofing & Solar – Your Lakeland Roofers
If it’s time to consider a new roof, contact the roofing service your neighbors trust – Stronghold Roofing & Solar. Our team of expert roofers can help you determine what type of roof matches your needs and your budget – and we can provide all the documentation you need to claim your new roof on taxes.
Give us a call today to get a free roof estimate!
FAQs – Roof Tax Credits
What is the difference between a tax credit and a tax deduction?
A tax credit directly reduces the amount you owe in taxes, while a tax deduction lowers your taxable income. Credits typically provide greater savings.
Does every new roof qualify for a tax credit?
No, only specific energy-efficient materials certified under ENERGY STAR® standards are eligible. Standard asphalt shingles without reflective properties do not qualify.
Can I claim the credit if I financed my roof replacement?
Yes, as long as you paid for the qualifying materials and installed them within the tax year, you can claim the credit even if the project was financed.
When should I file for the tax credit?
The credit should be claimed when filing your federal tax return for the year the roof was installed. Keep all required documentation in case of an audit.
Are there any Florida-specific incentives for roofing upgrades?
Florida does not have a statewide tax credit, but homeowners may find local rebates, PACE financing, or utility company incentives for energy-efficient upgrades. Check with your local utility company (e.g., FPL) or visit the Database of State Incentives for Renewables & Efficiency for Florida-specific programs.
How do I know if my roof material has the right Solar Reflectance Index (SRI)?
Your roofing manufacturer should provide documentation of the SRI value. For ENERGY STAR® certification, roofing products need an initial SRI of at least 25.
