Being a homeowner can be tough at times. But there are also a lot of unique benefits to owning your home and property. For instance, if you plan on replacing your roof, you may be eligible for tax credits. It all depends on your area, the type of roof, and energy efficiency ratings. These tax credits are known as home improvement tax credits. Let’s dive into these a little further.
What is a Home Improvement Tax Credit?
As an additional incentive for owning property and creating an energy-efficient home, the federal government offers numerous tax credits to offset the cost of repairs/renovations. Of course, the government does not send you a check or cash in an envelope. You do not receive this tax credit as if it were a rebate. Instead, you can make a sizable deduction on your annual tax return. Depending on your other deductions for the year, this tax credit may reduce the amount of federal taxes you pay.
It’s important to note that federal tax credits can change over time. A tax credit available today, for example, may not be available to you next year.
Tax Credits for Replacing Your Roof
Is there a tax credit for replacing your roof? Absolutely! If you are replacing or adding on to your existing roof, you may qualify for an energy-efficient home improvement tax credit through Energy Star. This tax credit amounts to 10% of the total cost. But, in order to qualify, your new roof must include certified metal or asphalt with pigmented coatings or cooling granules that are specifically designed to reduce heat gain within the home.
Furthermore, the tax credit does not cover labor costs. You’re completely on the hook for those costs, which is normal.