Understanding Tax Credits for New Roofs in 2020
Homeowners considering a roof replacement in 2020 may be wondering if they can benefit from any tax incentives. The good news is that certain energy-efficient roofing products installed on a primary residence in the United States prior to January 1, 2020, may qualify for a tax credit.
Key Details of the Roofing Tax Credit
The tax credit for qualifying roofing products is 10% of the cost, excluding installation expenses. This credit falls under the Non-Business Energy Property Tax Credits, which were retroactively extended through December 31, 2020.
To be eligible, the roofing materials must meet specific energy efficiency requirements:
• Metal roofs with appropriate pigmented coatings
• Asphalt roofs with cooling granules
These materials are designed to reflect more of the sun’s rays, reducing heat gain in the home and potentially lowering cooling costs.
How to Claim the Roofing Tax Credit
If you installed a qualifying roof in 2020, you can claim the credit when filing your taxes. Here’s what you need to do:
Keep all receipts and manufacturer’s certification statements
Fill out IRS Form 5695 (Residential Energy Credits)
Include the credit amount on your 1040 form
It’s important to note that this tax credit has a lifetime limit of $500 for all qualifying improvements combined. If you’ve claimed this credit in previous years, it may affect your eligibility for 2020.
Looking Beyond 2020
While the specific tax credit for roofing materials expired at the end of 2020, homeowners should be aware that energy-efficient home improvements may still qualify for other incentives. The Inflation Reduction Act of 2022 introduced new and expanded tax credits for various energy-saving upgrades, including some roofing materials.
Considerations for Homeowners
Even if you missed the 2020 deadline for this particular tax credit, investing in an energy-efficient roof can still provide long-term benefits:
• Lower energy bills
• Improved home comfort
• Potential increase in property value
When planning a roof replacement, consult with a qualified contractor about energy-efficient options that may qualify for current or future tax incentives.