The recently-signed “Emergency Economic Stabilization Act of 2008″ includes an extension of the residential tax credits for energy efficient improvements. The previous tax credits expired at the end of 2007.

It’s important to note that the new tax credits for installing energy efficient improvements are only good for 2009 installations. There are no tax credits for improvements installed during 2008.

The tax credits are available for insulation, replacement windows, water heaters, and certain high efficiency heating and cooling equipment. However, be aware that not all Energy Star rated improvements are eligible for the tax credit. Be sure to check EnergyStar.gov for rules and more details.

Here are some examples of the federal tax credits that are available to homeowners:

- Windows: 10% of cost, up to $200, for qualified ENERGY STAR windows, skylights and storm windows
- Doors (exterior): 10% of cost, up to $500, for qualifying doors (most ENERGY STAR doors will qualify)
- Roofs (metal): 10% of cost, up to $500, for qualifying ENERGY STAR metal roofs
- Insulation: 10% of cost, up to $500, for qualifying insulation (not vapor retarders or siding)
- Air Conditioning (split or package systems): $300 for qualifying systems, not all ENERGY STAR systems qualify
- Water Heaters (tankless only): $300 for qualifying systems
- Cars: Credits are available for certain cars, and is limited by 60,000 per manufacturer before a phase-out period begins
- Solar Water Heating: 30% of cost, up to $2,000, not available for water heaters used for pools or spas
- Solar Power (Photovoltaic): 30% of cost, up to $2,000, must provide electricity for the home
- Fuel Cells: 30% of cost, up to $1,000 per kW of power that can be produced

In addition, there are also larger exemption levels to assist middle-class and upper-middle-income taxpayers avoid getting hit with higher taxes related to the dreaded Alternative Minimum Tax.

For first-time home buyers (including those who bought foreclosed homes) who purchased a primary residence after April 8 and before Dec. 31, 2008, can qualify for a tax credit equal to 10 percent of the purchase price, with a maximum credit of $7,500 available for either a married couple filing jointly or a single taxpayer, on 2008 returns.

Also, first-time home buyers who purchase a home between Jan. 1, 2009 and June 30, 2009, can now claim the credit on either of their 2008 or 2009 income tax returns.

Vacation homes and rental properties do not qualify for the credit, which was a provision of the Housing and Economic Recovery Act of 2008 passed during the summer. The phrase “first-time home buyer” is used quite loosely in that it applies to anyone who had not owned a home for at least three years prior to the purchase.

This point is important, so keep in mind that the credit is actually a no-interest loan that must be repaid over 15 years.

“You add that to your tax liability over the next 15 years. It sounds great, but it gets complicated,” said Jack Nuckolls, a national tax director with the San Francisco office of BDO Seidman LLP.

Despite the payback requirements, “If you are eligible, you would be crazy not to take it,” Nuckolls said.

To qualify for the credit, a married couple filing jointly can have modified adjusted gross income of no more than $170,000 (the credits starts phasing out at $150,000). Single taxpayers can have modified adjusted gross income of no more than $95,000 (the credit starts phasing out at $75,000).