What Is The Green Roof Tax Credit — Articles Networx

What Is The Green Roof Tax Credit - Articles Networx

Have you recently made some sort of energy-efficient improvement to your roof? Or do you plan to do so in the next few months? If so, youre probably wondering if Uncle Sam appreciates your eco-friendly efforts. And the good news is that in many cases, he does!

The very first federal tax credits for energy-efficient home improvements date all the way back to 2006. They have since been extended multiple times, and were once again renewed as part of the American Taxpayer Relief Act in 2013. This last extension retroactively covers improvements made in 2011 and 2012, which means that taxpayers are now eligible for work done between January 1, 2011 and December 31, 2013.

The Residential Energy Efficiency Tax Credit applies to multiple specific home improvements which will directly increase a homes energy efficiency. It stipulates that the home must be an owner-occupied primary residence, and the improvements include upgrades to furnaces, air conditioners, windows, and more. And of course, there are credits for roofing improvements as well.

However, not all energy saving roofing projects are recognized as eligible for the tax credit. In fact, only a very few narrow upgrades are actually covered. Qualifying roofs must be made from either metal which includes a pigmented coating, or asphalt which includes cooling granules. These two types of roofing are less reflective when hit by sunlight, and therefore they can lower the surface temperature by up to 100 F. With these green roofs, much less heat is transferred into the home, which means much less energy is needed for cooling.

Qualifying roofs must also meet ENERGY STAR standards. But keep in mind, not all roofs with the ENERGY STAR seal are covered. The credit only applies to the specific metal or asphalt options outlined above. And finally, the roof must be expected to last at least 5 years. A 2-year warranty is sufficient to demonstrate this.

So, what kind of break does your new green roof get you? The tax credit repays up to 10% of the cost, not to exceed $500. Its important to note that this 10% figure applies to materials only, and does not include labor or installation fees. The credit is only for the roof itself.

The $500 limit is for all projects covered under the Residential Energy Efficiency Tax Credit. This means that anyone who has already claimed a credit for other upgrades may not be eligible, because the limit is for all energy credits combined. extending over the lifetime of the bill (all the way back to 2006). However for example, if you only claimed $200 one year, and $100 another year, then you would still be eligible for $200 more.

To apply for the tax credit, youll need to submit your federal income tax return for the year that the service was done. along with a completed copy of IRS Form 5695. The resulting credit will then be either subtracted from the taxes you owe, or added to your following tax return.

Remember to keep proof of the work in your own records as well, in case you ever get audited. Youll need the receipts which show the purchases, and youll also need to get a signed statement from the product manufacturer, certifying that the product qualifies for the credit. You do not need to submit these to the IRS with your other forms, but you do need to obtain them.

The Residential Energy Efficiency Tax Credit expires on December 31, 2013, which means time is running out. Remember, the roof needs to be installed, not simply purchased, in order to qualify. So if you want your green roof tax credit, you need to act now!

Additional regional tax credits and incentives may be available. Ask your roofing contractor for more information about these options and what you have to do to qualify.

Sayward Rebhal writes for Networx.com .

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