Is a Storm Shelter Tax Deductible?
If you’re a homeowner, you might be wondering if you can deduct the cost of installing a storm shelter. The answer to this question depends on your state. In Tennessee, for example, you can deduct up to $2,500 of your construction costs.
You can also get a tax break if you use standardized construction systems for your shelter. The International Code Council (ICC) 500 standard is designed to protect your home and your family in severe weather conditions, and it provides a common set of standards for manufacturers.
ICC 500-compliant products can increase the value of your home by 3.5 percent. They’re also a great way to prepare for tornadoes and other severe weather.
A tax credit is available to Alabama homeowners who install a storm shelter that meets FEMA P-320, FEMA P-361, or ICC 500 guidelines on or after January 1, 2022. The amount of the credit is 50 percent of the total cost of the shelter, capped at $3,000.
In order to receive this credit, you must submit an annual information report to the Alabama Emergency Management Agency. This report reflects your costs for the shelter, and you’ll be asked to provide additional information as needed by AEMA.
If you qualify, the EMA will then issue a tax credit certificate to you. This will reduce your income taxes by 50% of the credit amount.
It’s important to note that this credit is only available to eligible taxpayers, and it’s separate from any other grants or subsidies you may receive. You must also meet the requirements of your county and municipal emergency management department.
You can find more details about the program on the EMA’s website. You’ll need to provide a specification sheet from the manufacturer of your storm shelter or safe room, proof that you own and live in your primary residence, and an invoice for acquisition or installation costs.
The EMA has a $2 million cap on tax breaks for the next three years. If you’re a resident who qualifies, it’s easy to apply. Just follow the steps on the EMA’s website.
Several states are discussing rebate and tax credit programs for storm shelters. Oklahoma, for example, has a SoonerSafe program that offers up to a $2,000 refund for shelters that meet ICC 500 standards.
In addition, Alabama recently started a program for residents to claim tax credits for building or improving storm shelters that meet FEMA P-320 and FEMA P-361 guidelines. The tax credit is up to $3,000, and the program is only open to residents who install a FEMA-approved storm shelter that meets these guidelines on or after January 1, 2022.
This program is similar to the one in Oklahoma, although it differs in scope and rules. The Oklahoma program has a lower maximum rebate and fewer restrictions than the program in Alabama, so it’s worth looking into both of these.
Regardless of which state you’re in, the shelter industry encourages you to build or purchase a storm shelter that meets ICC 500 standards. In addition to increasing the value of your home, a tornado shelter can protect you and your family from potentially life-threatening situations.