Determine the cost of replacing your windows. Make sure that you keep records documenting your costs in case the IRS questions your tax return.
Complete form 5695 to determine the amount of the credit you are eligible to claim. The credit equals the lessor of 30 percent of the cost of installation or $1,500. For example, if you spent $1,000 on new windows, you would be able to claim a $300 tax credit. If you spent $5,000, you would only be eligible to claim $1,500.
Write the result from form 5695 onto line 46 of your form 1040 tax return. This will ensure that your tax liability decreases because you claimed the tax credit.