New Roof Tax Credits

As you might already know, the federal government often offers tax credits to incentivize eco-friendly improvements on your home. You can, for instance, get a tax credit for installing a solar water heater or a more efficient furnace. And in 2016, you can get a tax credit for an energy-efficient roof, too!

The details

This tax credit is a federal income tax credit, and it’s effective through the end of this year: December 31st, 2016. In other words, you must have the roof installed before the end of the year to claim the credit.

The credit is for up to 10% of the cost of your roof, not including installation costs. You can claim up to $500. So to get the full credit, you’ll need to spend $5,000 on roofing materials.

One item of note here: roofs installed on business and secondary properties don’t count. The roof needs to be on your primary residence in order to apply for this tax credit. Your principal residence is defined as a home that you own and that you live in most of the time. Also, the roof must be retrofitted to an existing home. You can’t claim the credit if you’re adding a cooling roof to a new construction home.

So what types of roofs are eligible? Right now, the credit is focused primarily on cooling roofs. This includes certain metal roofs with pigmented coatings that reflect light to keep the inside of the house cooler. The other option is an asphalt roof with cooling granules, which has a similar effect.

Basically, this is the perfect roof tax credit for SoCal. Many other EnergyStar related credits are meant for helping keep homes warmer at lower energy cost. These are great for people in the Midwest and the East Coast, but not so much here in Sunny California.

But if you live in our area and don’t have a home that’s heavily shaded by trees, a cooling roof could net you a tax credit and save you money year after year on your energy bills.

How to apply

The first thing to do is to talk to your Orange County roofing contractor about cooling roofs that might be appropriate for your home. Since this is just a $500 tax credit, it doesn’t make much sense to replace your whole roof just to claim the credit! Instead, talk with an expert to make sure that this is really the right move for you.

Ideally, you’re going to replace your roof anyway, but this tax credit has triggered you to think about replacing your current roof with a cooling roof. But if you’re having major problems keeping your home cool for a reasonable cost, you could consider replacing your shingles with cooling asphalt shingles. This may be worth the cost, depending on your current situation.

You may need to look into how much energy a cooling roof could save you, and then run some calculations about your cost over time, and when you can recoup the cost of installing the roof. It sounds like complicated math, but it’s really just taking the total cost of the roof, materials and installation, and dividing it by your annual projected savings. Whatever your result, that’s how long it will take you to break even on your investment in the new roof.

The key here is to start with an expert who understands this credit, and who understands which roofing materials will qualify for the credit. For instance, not all metal roofs qualify. The roof needs to have certain pigmentation meant to reflect the sun’s rays and so to let less heat into the house. If it doesn’t meet EnergyStar standards, then you’re out of luck and will be unable to claim the credit

Once you’ve settled on the roof and materials, ask your Orange County roofer to help you obtain a Manufacturer’s Certification Statement. This is a signed statement from the manufacturer that notes that your roofing product complies with the tax credit regulations. Usually, you can find this on a manufacturer’s website. If you can’t find it, though, your roofer should be able to help.

Then, when the roof is installed and you’re filing your 2016 taxes, you should fill out Tax Form 5695 to claim the credit. Send in the certification statement with that year’s taxes, and enjoy taking up to $500 off of your taxes.

If you have any questions, be sure to reach out to Luke Roofing. A long-established Orange County roofer, we provide prompt, reliable expertise for every residential roofing need and situation. Wherever and whenever you need roofing services in La Palma or anywhere else in OC, you definitely can count on Luke Roofing.