Roof Replacement: How to Qualify For the $1,500 Tax Credit

If you need a new roof you might as well learn how to take advantage of the tax credits being offered by Uncle Sam. It could mean $1,500 in your pocket.

Since you are looking to replace that old roof of yours you might as well get a little governmental help while you are at it. Did you know that the new economic stimulus bill has tripled the previous Energy Star tax credit to $1,500? If you are smart the first question you are probably wondering is what type of roofing qualifies.

Did you know that metal roofs and "reflective asphalt shingles" that also meet ENERGY STAR requirements are eligible for the tax credit? That is right, approved asphalt Shingle and Metal Roofing installations for New Construction and Re-Roofs for Commercial and Residential structures.

What is an "Approved" roof?

Keep in mind Energy Star ratings are based on reflectivity, so they are mostly beneficial to non-shaded homes that have to endure a lot of sun.

Believe it or not the most energy efficient choice is a... Stone-Coated Steel roof (using recycled steel). The reason why is that it acts like a double-pane windows with its air-space and so it will insulate your home year round. This will save you money for the entire duration of the roof's life which will be more than fifty years. Going with a metal roof will help reduce shingles and other "temporary roofs" from clogging our landfills and will save valuable resources, such as, petroleum used for shingles and trees used for wood shake roofs.

How is the tax credit calculated? The tax credit is for 30% of the cost of roofing materials only, up to $1,500. Installation or labor costs are not eligible for the 30% tax credit. Unfortunately, roof coatings are NOT eligible for the tax credit.You may also want to know if your income affects your tax credit. That answer is a resounding - No. Thankfully there is no upper or lower limit on income for the energy efficient tax credits.

However, these energy efficiency tax credits are technically "non-refundable" which means you can't get more money back in tax credits than you pay in federal income taxes (check your W2 or last year's tax return to get a sense for how much federal income tax you pay). You can claim the entire credit as long as the total amount of federal income tax that you owe, minus your deductions, is more than the total amount of all non-refundable tax credits that you are claiming.

What do you need to submit to the IRS for verification? Manufacturers should provide a Manufacturer's Certification Statement and you should keep this for your records or it may be published on their website. Otherwise, you are not required to submit it to the IRS, you or your accountant will just fill out the appropriate "residential energy tax credit" form (form 5695) and submit it with your taxes.

All you need to do know is to contact a local stone covered steel roofing contractor in your area.