Tax Credits for Energy Efficient RoofingApril 15, 2013
Tax credits help you save money, but it’s important to read the fine print. While energy efficient home improvements are once again eligible for tax credits, not all improvements qualify. If you are in the market for a new roof, you will be excited to learn that you may be able to write off part of the expense if you choose a qualifying, energy-efficient roof.
Write off 10 percent of the cost of your new roof when you have it installed before December 31, 2013. The credit is good for $500, but the roof must be installed on your primary existing residence. New construction roofs do not qualify, and neither do rentals. Qualifying roofs will be metal with special pigmented coatings or asphalt with special cooling granules that meet Energy Star requirements.
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Manufacturers are proud of their Energy Efficient products. Roofing companies clearly mark their qualifying products with the Energy Star label. Look for this label when reviewing different roofing options. Your local roofing company can also give you more information about different Energy Start products and how they compare to each other.
The credit requires that you also have a signed statement from the manufacturer verifying that the product meets the guidelines for a credit. An experienced installation company will have copies of these statements on hand for your convenience. The statement does not need to be submitted with the tax return, but it should be kept in the records in case of an audit.
When it’s time to file your taxes, you will need form 5695. Available from the IRS website, you will use this form to calculate the amount of your credit. The improvements will be listed on lines 2 and 3 in part I of the form. The cost entered should include both materials and labor. Receipts will be required if you are ever audited, so make sure you keep a copy of the receipt. The work also must be completed in the 2013 calendar year, so be sure that the information on your receipt accurately reflects a 2013 installation date.
This is a tax credit rather than a deduction, so it can help you save a substantial amount of money. When you claim the credit, your tax burden will be reduced by the full amount of your credit. If you would have owed $1,500 before the tax credit, then your tax bill will drop to $1,000.
If you need a new roof, an energy efficient option will make your heating and cooling bills lower. However, you can look forward to more than just the utility savings. With the tax credits for energy efficient home improvements, you can also lower your tax bill by $500. Call your accountant or Mad City Windows if you have more questions about this important program.