Roofing Materials That Qualify for Energy Tax Credits

Understanding the Section 25C Tax Credit

The Energy Efficient Home Improvement Credit was expanded and extended by the Inflation Reduction Act of 2022 and applies to qualifying improvements installed from 2023 through 2032. For roofing, the credit equals 30 percent of the cost of qualifying roofing products (material only), up to a maximum annual credit of $1,200 across all qualifying home improvements combined (not just roofing).

This is a tax credit, not a deduction. A tax credit directly reduces the amount of tax you owe, dollar for dollar. If you owe $5,000 in federal income tax and claim a $1,200 roofing credit, your tax bill drops to $3,800. This makes the credit significantly more valuable than a deduction of the same amount, which would only reduce your taxable income.

The credit is non-refundable, meaning it can reduce your tax liability to zero but cannot generate a refund beyond what you have already paid. If your total tax liability is less than the credit amount, you lose the unused portion. There is no carry-forward provision for unused credits under Section 25C.

The $1,200 annual limit resets each year, so if you complete roofing and other qualifying improvements in separate tax years, you can potentially claim the maximum in each year. However, most homeowners complete their roofing project in a single year and claim the credit once.

Which Roofing Materials Qualify

The IRS requires that qualifying roofing products meet Energy Star certification standards for their product category. The specific requirements are:

Metal roofing with pigmented coatings. Metal roof panels or shingles with factory-applied coatings that meet Energy Star requirements for solar reflectance qualify for the credit. The coating must achieve a minimum initial solar reflectance of 0.25 for steep-slope applications. Most light and medium-colored standing seam panels, metal shingles, and stone-coated steel products from major manufacturers meet this threshold. Dark-colored metal panels without cool roof coatings generally do not qualify.

Asphalt shingles with cooling granules. Asphalt roofing products that meet Energy Star reflectance requirements also qualify. These are specifically manufactured cool roof products with engineered granules that reflect infrared radiation. Standard asphalt shingles, even in light colors, typically do not meet the reflectance threshold unless they are specifically designated as Energy Star certified by the manufacturer. Look for the Energy Star label on the product packaging or the manufacturer's product data sheet.

Products that do not qualify. Standard asphalt shingles without cool roof designation, wood shake, clay tile, concrete tile, and membrane roofing (TPO, EPDM, PVC) are not currently eligible for the Section 25C credit, even if some of these materials have excellent energy performance. The credit applies specifically to products that meet the Energy Star roofing certification, which currently covers only metal and asphalt products with qualifying reflectance values.

How to Calculate Your Credit

The credit calculation uses the material cost only. Labor, underlayment, flashing, tear-off, disposal, and other project costs are not eligible. Here is how the math works:

If your roofing project costs $18,000 total and the qualifying metal panels cost $8,000 (with the remaining $10,000 being labor and accessories), your eligible cost is $8,000. At 30 percent, the credit would be $2,400, but the annual maximum caps it at $1,200. Your actual tax credit is $1,200.

If your project uses Energy Star asphalt shingles costing $3,000 in materials, your eligible cost is $3,000. At 30 percent, the credit is $900, which is below the $1,200 cap. Your actual tax credit is $900.

The material cost should be clearly itemized on your contractor's invoice. If the invoice shows a single lump sum for the entire project, ask your contractor to provide an itemized breakdown separating material costs from labor and other charges. The IRS requires documentation supporting the credit amount if your return is examined.

Documentation Requirements

To claim the Section 25C credit, you need three pieces of documentation:

Manufacturer Certification Statement. The roofing product manufacturer must provide a written statement certifying that the product meets Energy Star requirements for roofing. Most qualifying products include this certification on their packaging, product data sheet, or website. Download and save this document before filing your tax return.

Itemized invoice or receipt. Your contractor's invoice should clearly show the cost of the qualifying roofing materials separate from labor, tear-off, accessories, and other charges. The invoice should identify the specific product by brand name and model number so the product can be matched to the manufacturer's certification.

IRS Form 5695. The credit is claimed on Form 5695 (Residential Energy Credits), which you attach to your federal income tax return. Part II of Form 5695 covers the Energy Efficient Home Improvement Credit. Enter the qualifying material cost on the appropriate line and calculate the credit per the form instructions.

State and Local Incentives

Beyond the federal credit, many states, cities, and utility companies offer additional incentives for energy efficient roofing. These may take the form of state tax credits, property tax exemptions for energy improvements, utility rebates for cool roof installations, or reduced permit fees for projects meeting certain energy standards.

The Database of State Incentives for Renewables and Efficiency (DSIRE) at dsireusa.org is the most comprehensive resource for finding incentives in your area. Enter your ZIP code to see all available federal, state, local, and utility incentive programs. Some state incentives can be stacked with the federal credit, effectively doubling the financial benefit.

Common state-level incentives include California's Title 24 cool roof requirements (which mandate cool roofing in certain climate zones, making qualifying products the code-minimum rather than an upgrade), Florida's property tax exemption for qualifying renewable energy and energy efficiency improvements, and various utility company rebates that pay $0.10 to $0.30 per square foot for verified cool roof installations.

Timing Considerations

The Section 25C credit is available for products installed from January 1, 2023 through December 31, 2032. The credit is claimed in the tax year the installation is completed, regardless of when payment was made. If you sign a contract and make a deposit in December but the installation is completed in January, you claim the credit in the year the installation finishes.

Because the $1,200 annual limit applies across all qualifying home improvements (not just roofing), coordinate with any other energy improvements you plan to make in the same year. If you install a qualifying roof, a new heat pump, and new insulation in the same year, the combined credits for all improvements are subject to category-specific limits that fit under the broader $1,200 ceiling for most items (heat pumps have a separate $2,000 limit).

Consult a tax professional if your total qualifying improvements approach or exceed the annual credit limits. Strategic timing of improvements across tax years can maximize the total credits you claim over the program's duration.

Common Mistakes to Avoid

The most frequent errors homeowners make when claiming the roofing tax credit include claiming the credit on a non-qualifying product (standard shingles that are not Energy Star certified), including labor costs in the credit calculation, failing to obtain the manufacturer certification statement, and confusing the Section 25C credit with the separate Section 25D credit for solar energy systems. If you install solar panels or solar shingles, those qualify under Section 25D with different rules and a higher credit percentage (30 percent with no dollar cap through 2032).