At the end of 2010, the $1,500 tax credit for energy efficient home upgrades (including energy-efficient windows) expired. Fortunately, the 25C Residential Energy Efficiency Tax Credit remains in place at its pre-ARRA level. This allows for a tax credit of 10% of the purchase price of home improvement and/or Energy Star-qualifying windows. Home improvement credit is capped at $500. Qualifying window credit is capped at $200. The credit is scheduled to expire on December 31, 2011.

• Windows must be placed in service in 2011, and installed on an existing home that is your principal residence. New construction projects and rentals don’t qualify. .
  
  
• The Tax Credit does NOT include installation costs.
  
  
• You need to file the 2011 IRS Form 5695 and submit it with your 2011 return (by April 15, 2012).
  On the 1040 form, the residential energy tax credit (from Form 5695) is claimed on line 52.
  
  
• Save your receipts and the Manufacturer's Certification Statement for your records. 

Information Source: Energy Star:
http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

Installing new energy-efficient windows will earn you much more than a one-time tax credit. Over time you will recoup the cost of the windows altogether through lower energy bills and an increase in the value of your home.