Is roof replacement tax deductible?

By March 10, 2021 No Comments
tax credit

Replacing a roof is no small matter. Factor in labor and materials and your average roofing job is going to cost at least 7 thousand dollars. If you’re a financially savvy homeowner, you’re probably wondering is roof replacement tax deductible, specifically in Columbus, Ohio. The immediate answer is not really, however, if you keep a record of your home improvements, particularly if you are installing a solar electric system, then you can qualify for specific deductions. Let’s look into how you could potentially qualify for deductions for a roof replacement.

The golden age of tax deduction for roof expenses in Columbus lasted for 2 years. Between 2009 and 2011, if you replaced your roof with an Energystar rated roofing material, you would be eligible for a tax credit up to 30% of the cost of the roof or $1,300. Unfortunately, that tax credit is no longer available. Likewise, because a roof replacement is considered a home improvement, it is not immediately eligible for a tax deduction in the tax year that you had the roof replaced. However, because replacing a roof adds value to your home, it factors into the adjusted basis of your home, or the assessed value of your home after the improvements are completed. When you eventually sell your home, the increased adjusted basis due to the investment in improving your home will reduce the taxes that you will be paying for selling your home. So, while not an immediate deduction, it can eventually serve as one. On a slightly different note, if the roof you are repairing is for a rental property, repairs and improvements can immediately be deducted relative to the cost of operating the rental property. This is one reason why you want to keep a record of all improvements of your roof, regardless of whether it’s a permanent home or rental.

If you are having solar installed, there is a potential to earn the solar income tax credit. The cost of replacing your roof can be deducted if supporting girders are needed to support the solar panels or if special shingles are being installed. Similarly, there are some shingles which can be installed as a photovoltaic system in themselves and which would qualify for the solar tax credit. All of these deductions are dependent on you actually owning the solar panels; if they are being leased, then you would not qualify for the deduction. Ultimately, however, only the solar panels themselves are deducted with the solar tax credit, and your roof replacement would not qualify.

Despite the expense of a roof replacement, it generally is not considered a qualifying deduction on your income tax returns. At the same time, there are some circumstances which may allow you to submit some or all of the cost of your roof for a deduction. It’s always best to speak with a qualified tax professional to understand exactly what deductions you are eligible to receive. We hope that this guide has helped to clarify some of your questions regarding deducting the costs to replace your roof, and hopefully in the end you can save some extra green when it comes time to welcome in a new roof.

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