Metal Roofing Tax Credits Extended Through December 2016

By Scott Kriner, Green Metal Consulting

As the political process of electing a new President intensifies with each debate, campaign commercial and promise made, we learn more about the activity or inactivity of our elected representatives. Some say that these folks who live and work inside the DC Beltway are detached from their constituents.

In between their voting, speaking, filibustering or fund raising they can enjoy some lavish perks and benefits. The starting salary for a member of the House of Representatives is $174K and if that is not enough to make ends meet, they can supplement their income up to 15% of their salary. Members of Congress participate in the Federal  Employee’s Health Benefits Program (FEHB). I wonder if there is a clause for that benefit in the Affordable Care Act (aka “ObamaCare”). But our federal lawmakers have their own attending physician on Capitol Hill. About the only thing in common with the electorate is that they too pay into Social Security and are eligible for retirement benefits beginning at age 62. But their pensions are generous compared to the standards of the common folk.

With that package in hand, our representatives are always very hard at work in reaching consensus with other lawmakers and we see more and more legislation that benefits all of us…right? Well, gridlock, filibusters, vetoes and Executive Orders are a more exact description of what is happening in Washington these days. This new normal, even in the legislative branch of Washington, is not reserved just for federal lawmaking. In my home state of Pennsylvania, our Governor and the Legislative branch of the state government have been trying for over 6 months to reach an agreement on a budget. Meanwhile, state subsidized programs, pre-kindergarten , domestic violence shelters, and some school programs throughout the state are running out of funding. . And yet, we saw visions of lawmakers running out of their chambers and down the steps of the Capitol building to get home for their Christmas break with no budget in hand. That vision was enough to make your blood boil.

But in all fairness, every now and then, some good legislation is passed at the local, state or federal level. And we should be thankful when this takes place.

One such legislative action that benefits the metal roofing industry took place just before the end of 2015. In mid-December 2015 the 114th Congress passed the Consolidated Appropriations Act of 2016, and the Protecting Americans from Tax Hikes Act of 2015 when the Senate passed H.R. 2029. Both of those laws were then signed by President Obama before his Christmas break. The significance of those laws is that they extended some of the tax benefits for certain energy efficient building materials as well as for energy efficient buildings. This extension, through December 31, 2016, applies to certain envelope components, on existing residential property, placed into service after December 31, 2014.

A tax credit of 10% of the cost, up to $500, is now available to homeowners for installation of insulation, exterior windows (capped at $200), doors, skylights, or metal roofs with appropriate pigmented coatings, and asphalt shingle roofs with appropriate cooling granules that meet ENERGY STAR requirements. But installation costs do not apply. For new residential construction, the extension applies to a tax deduction up to $2,000 to a qualified contractor of energy efficient homes.

The extension also includes the energy efficient commercial buildings deduction(179D) through December 31, 2016. Using the 179D deduction, building owners and tenants who make expenditures to cause new or renovated commercial buildings to be more energy efficient, and designers of qualifying government buildings, will again be eligible for a significant Federal tax deduction of an immediate one time depreciation deduction of up to $1.80 per square foot.

Other energy efficiency provisions in the recent bills include an extension of the phase- out of wind production tax credits until 2020, as well as extending and phasing down the solar investment tax credit until 2022. Other energy technologies such as geothermal, biomass, landfill gas, incremental hydroelectric, and ocean energy projects will continue to qualify for the Production Tax Credit, but must start construction by December 2016.

Many of these tax benefits were first included in the original federal Energy Policy Act of 2005, signed into law by President George W. Bush on August 8, 2005. Since then the amount of the tax credits and deductions has changed a bit and the extensions beyond the initial legislation were intermittent. But for now, the metal roofing industry can enjoy another year with more opportunities for cool metal roofing thanks to the extended legislation of our Congress in the last few days of 2015. Better late than never.

More detailed information on the extended residential roof tax credits can be found at the Energy Star website .

Scott Kriner is the president and founder of Green Metal Consulting Inc. He is a LEED Accredited Professional who began his career in the metal construction industry in 1981. His company is a member of the U.S. Green Building Council, the California Association of Building Energy Consultants and the Residential Energy Services Network (RESNET).

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