How to Claim the Metal Roof Tax Credit 2024

Homeowners making energy-efficient upgrades may be eligible for a federal tax incentive. The Energy Efficient Home Improvement Credit, updated by the Inflation Reduction Act, reduces your tax liability for certain improvements made from 2023 through 2032. The updated credit does not include roofs as a qualifying category. Instead, it focuses on other building envelope components like exterior doors, windows, skylights, and insulation.

Qualifying for the Home Improvement Tax Credit

To claim the tax credit, homeowners must meet requirements for their personal status and the property. The credit is for individuals who own their home and use it as their primary residence, where you live most of the year. The improvement must be to an existing structure in the United States, as the credit does not apply to newly constructed homes, rental properties, or second homes.

The requirements also relate to the home components. Qualifying building envelope components must meet specific energy-efficiency standards and are limited to:

• Exterior doors
• Windows
• Skylights
• Insulation materials

Roofing materials are not included in this category. While insulation added to an attic or roof may qualify, the cost of roofing material itself, like metal panels or shingles, is not eligible.

Calculating the Credit Amount

The credit equals 30% of the cost of specific energy-efficient building envelope components. This calculation applies only to the cost of the materials themselves. Expenses for site preparation, assembly, or installation labor are not included.

There is an annual cap on the amount of credit you can claim for these improvements. For building envelope components, the maximum credit is $1,200 per year. The credit is also nonrefundable, which means it can reduce your tax liability to zero, but you will not receive it back as a refund.

To illustrate, consider a homeowner who purchases qualifying energy-efficient windows for $5,000. A calculation of 30% of this cost is $1,500. However, because the credit is capped at $1,200 for this category, the homeowner would only be able to claim a $1,200 credit. If the material costs were $3,000, the credit would be $900, since this is below the annual limit.

Required Documentation and Forms

Documentation is required to substantiate your claim. You must obtain a Manufacturer’s Certification Statement from the company that produced your qualifying components. This signed document from the manufacturer attests that the product meets the necessary energy efficiency standards. You do not file this statement with your taxes but must keep it for your records.

You can get this certification from the contractor who installed the components or by downloading it directly from the manufacturer’s website. This statement is your primary evidence that the materials are eligible. Without it, you risk having your credit disallowed if your return is audited.

The official tax form for claiming this credit is IRS Form 5695, Residential Energy Credits. You will use this form to calculate and report the credit amount by entering the cost of the qualifying materials. The form and its instructions can be downloaded from the IRS website.

How to Claim the Credit

To claim the credit, you must attach the completed IRS Form 5695, Residential Energy Credits, to your main tax return, Form 1040. This is how you officially report the credit to the IRS.

The credit amount calculated on Form 5695 is transferred to Schedule 3 (Form 1040), Additional Credits and Payments. This schedule consolidates various tax credits before they are carried over to the main Form 1040. The total from Schedule 3 then directly reduces the amount of tax you owe.

After filing, you must maintain thorough records of your home improvement project. Keep the Manufacturer’s Certification Statement, the purchase invoices for the materials, and a copy of your filed tax return, including Form 5695. Store these records with your tax documents for at least three years from the filing date.