What the credit actually does

Section 25C of the Inflation Reduction Act credits 30% of a qualifying heat pump's cost against federal tax owed, capped at $2,000 a year. This site applies it to the gross equipment cost before working out the incremental comparison against a like-for-like furnace-and-AC replacement, because that is the order a homeowner actually experiences it in.

Where it makes the biggest difference

Phoenix, AZ is the clearest case: without the credit, the incremental payback runs 7.8 years; with it, 2.6. San Antonio, TX, Jacksonville, FL, El Paso, TX, and Tucson, AZ all show the same pattern, each dropping from a payback in the 8-to-9-year range down to roughly 3 years once the credit is applied. In each of these, the credit is not what makes the case work — the running-cost savings were already positive — but it compresses the payback window enough to turn "eventually worth it" into "worth it soon."

Where it changes nothing

Minneapolis, MN still receives a credit amount on its page, and it still does not matter: the annual running cost there is HIGHER with a heat pump than with the gas furnace it replaces, so there is no positive payback for a lower upfront cost to accelerate. A 30% discount on a purchase that loses money every year it operates is still a purchase that loses money every year it operates. See the no-payback guide for the full list of cities where this applies, and the electric-resistance guide for the comparison where the credit and the running-cost savings both actually help.