On September 15, 2026, the U.S. Census Bureau reported that 13.1% of people in the United States lived in poverty in 2025, as measured using the Supplemental Poverty Measure (SPM). Absent tax credits and transfer programs, the national poverty rate could have been much higher, demonstrating policy’s key role in reducing the poverty rate. The Census Bureau annual poverty report documents the effects that individual policies play in reducing the poverty rate in the United States. For example, the report shows that the Supplemental Nutrition Assistance Program reduced the poverty rate by 0.9 percentage points, keeping 3.1 million Americans out of poverty in 2025. But the Census Bureau does not publish these results by state.
In this 50-state analysis, we build on these national-level estimates to show the impact of tax credits and transfers in reducing state-level poverty rates. We present the combined total effects of tax credits and transfers for each of the 50 states and the District of Columbia, as well as the individual effects of select policies, mirroring the national estimates published by the Census Bureau. Because state estimates require three years of data, our estimates are based on data from 2023 to 2025 of the Current Population Survey Annual Social and Economic Supplement (CPS ASEC).
It is critical to note that these estimates capture the policy landscape prior to the full implementation of major changes to the tax and transfer system enacted through the federal budget reconciliation law H.R. 1, also known as the One Big Beautiful Bill Act (OBBBA), signed into law in July 2025. As such, they represent the effects of these policies on the eve of major changes and cuts to the U.S. tax and transfer system. They represent the state-level effects of policies that may be eroded in 2026 and beyond as the policy changes from H.R. 1 take fuller effect.
Suggested Citation:
Wilson, Danielle, Megan Curran, and Christopher Wimer. 2026. The role of tax credits and transfers in reducing state-level poverty: A 50-state analysis, 2023-2025. New York City: Center on Poverty and Social, Columbia University.
Published on September 15, 2026