Homeowners and commercial building managers frequently do not know whether a roof replacement constitutes a tax deduction. Tax provisions tend to be confusing and difficult to interpret. Many common misconceptions exist relating to what home improvements, if any, offer tax deductions (or other tax incentives, for that matter).
When considering tax benefits, homeowners and businesses often ask if a roof replacement is tax deductible. If it is not tax-deductible, they may inquire whether a tax incentive program exists to receive a tax credit or rebate. Answering this question can pose a challenge. Working with a qualified tax professional offers solutions.
Is A Residential Roof Replacement Tax Deductible?
A home improvement, or capital improvement, is a permanent upgrade to substantially improve your home’s property value. A roof replacement may often qualify as a home improvement for tax purposes. In other instances, it might not.
Assuming the roof replacement meets the Internal Revenue Service (IRS) definition of a home improvement, projects of this type do not have a tax-deductible element. On the contrary, no tax incentives exist for the average roof replacement.
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Is A Commercial Roof Replacement Tax Deductible?
For nonresidential properties, capital improvements (including roof replacements) often provide a tax-deductible element at the federal level. A commercial property owner may deduct up to 
100% of the cost to replace or upgrade their roofing system from their business’s federal income tax filing in the calendar year when the roof replacement occurred.
Under Section 179 of the IRS Tax Code, a business benefits from replacing its existing roofing system with a new roof. The new roof often incorporates state-of-the-art technological advancements, making it more energy-efficient and environmentally responsible. Leveraging this tax provision affords businesses substantial tax relief.
Although write-off limits apply, most new commercial roofing systems qualify. To learn more about federal, state, and local tax deductions (as well as other tax-related benefits) associated with a roof replacement, contact a professional tax advisor with the knowledge and experience to navigate through the IRS Tax Code and applicable state or local tax laws.
Beginning January 1, 2023, a federal tax deduction is available for building owners putting into service a qualified energy-efficient commercial building property (EECBP) or energy-efficient commercial building retrofit property (EEBRP). The exact deduction amount involves a specific calculation that a knowledgeable business tax professional can help determine.
Are There Any Residential Tax Incentives Available For Roofing System Upgrades?
Although a residential roof replacement does not provide a federal tax deduction (or credit), other home improvements corresponding to the roofing system may enable the homeowner to access federal tax credits. The federal government provides tax credits for homeowners who invest in energy-efficient upgrades under the Inflation Reduction Act of 2022. These tax credits help offset the cost of improvements that reduce energy consumption in your home. This tax incentive program runs from January 1, 2023, through December 31, 2032.
The Energy Efficient Home Improvement Credit
The Energy Efficient Home Improvement Credit (formerly called the Nonbusiness Energy Property Credit) allows homeowners to claim tax credits for qualified energy-efficient improvements. While standard asphalt roof replacements don’t qualify for this credit, certain energy-efficient roofing materials and related upgrades can help Cincinnati homeowners reduce their tax burden.
Requirements for Roof Replacement Tax Credits
Most standard asphalt roof replacements don’t qualify for federal tax credits. However, specific energy-efficient roofing materials may qualify if they meet certain criteria:
- The roof must be installed on your primary residence
- Roofing materials must meet Energy Star certification requirements
- Installation must be completed by a qualified contractor
- The project must be finished within the tax year you’re claiming the credit
Titan Siding and Roofing specializes in asphalt roofing installations for residential properties. While our standard asphalt shingle roofs provide excellent protection and durability for Cincinnati’s climate, they typically don’t qualify for the roofing tax credit. However, we can discuss energy-efficient upgrades like insulation that pair well with your roof replacement and do qualify for federal tax credits.
Roofing Materials That May Qualify for Residential Energy Efficient Property Credits
Energy Star Certified Metal Roofs & Solar Reflective Materials
Energy Star certified metal roofs and solar reflective materials, including certain tiles, can qualify for the tax credit. These roofs reflect sunlight and reduce heat absorption, which lowers cooling costs during hot summers. The Energy Star certification confirms that the materials meet strict energy efficiency guidelines set by the federal government.
Energy Star Certified Skylights
Energy Star certified skylights qualify for federal tax credits and can be installed during roof replacement projects. Skylights bring natural light into your home while meeting energy efficiency standards that help reduce heating and cooling costs. These qualify as home envelope improvements under the Inflation Reduction Act of 2022.
Insulation Materials
Energy Star certified insulation materials offer the most accessible tax credit opportunity for Cincinnati homeowners planning roof replacements. Eligible materials include products that reduce air leaks (caulk, spray foam, weather stripping, and house wrap) and products that insulate (rolls, blow-in fibers, expanding spray, rigid boards, and similar options). Adding or upgrading insulation during a roof replacement makes practical sense since the roof deck is already exposed during installation.
What Cincinnati Homeowners Should Know
If you’re interested in claiming federal tax credits for your roofing project, discuss your options with a qualified tax professional before making material selections. While Titan specializes in traditional asphalt roofing that provides excellent value and protection, we’re happy to recommend contractors who work with qualifying metal roofing systems if that better fits your goals.
For most Cincinnati homeowners, the real tax credit opportunity comes from pairing your roof replacement with qualifying insulation upgrades or Energy Star certified skylights.
Home Envelope Improvements Provide Federal Tax Credits For Homeowners
Because both insulation materials and skylights are considered home envelope improvements under the Inflation Reduction Act of 2022, the total available tax credit for a given year is $1,200. For example, if a homeowner buys and installs a $5,000 skylight, they can claim up to 30% of the cost ($1,500) to the maximum of $600, whichever amount is less. The homeowner could not claim the $900 difference.
If, in that same year, the homeowner also purchases $3,000 of qualifying insulation materials (including, but not limited to, products that reduce air leaks (caulk, spray foam, weather stripping, and house wrap) and products that insulate (rolls, blow-in fibers, expanding spray, rigid boards, etc.), they can claim up to 30% of the cost ($900) to the maximum of $1,200 as a credit, whichever amount is less.
Note: In this situation, the homeowner can claim only a total of $1,200 for all home envelope improvements in a given year. If the homeowner claims $600 for the skylight, they only have $600 remaining for that year under this provision. The homeowner would be permitted to claim $600 of the $900 of the insulation product purchase. The other $300 would not be eligible for a tax credit in this particular circumstance.
Working With A Knowledgeable, Experienced Roofing Contractor
If you own a home or business in Greater Cincinnati, trust the experts at Titan Siding and Roofing to provide unsurpassed roofing services. We have the expertise and tools to help with all types of residential and commercial roofing needs, including roof replacement, storm damage restoration, and gutter installation. Individuals, families, and businesses consistently rely on us to meet deadlines and exceed expectations.
Contact Titan Siding and Roofing today to schedule a free consultation or learn more about our complete line of roofing services.
FAQs
What are the qualifying requirements for a roof replacement tax credit?
The roof must be on your primary residence, materials must meet energy efficiency standards, installation must be professional, and the project must be completed within the tax year.
What roofing materials qualify for the Energy Efficient Home Improvement Credit?
Energy Star certified metal roofs and solar reflective roofing materials may qualify if they meet specific energy efficiency standards. Titan Siding and Roofing specializes in asphalt roofing installations and can connect you with tax professionals for guidance on qualifying materials.
Can I claim a tax credit if I finance my roof replacement?
Tax credits are claimed in the year the work is completed and paid for, regardless of payment method. If you finance through options like our Kemba Financing partnership, you can still claim applicable credits for qualifying materials. Consult a tax professional about timing and documentation requirements.
