The Role of Tax Credits and Transfers in Reducing State-Level Poverty: A 50-State Analysis

On September 9, 2025, the U.S. Census Bureau reported that 12.9% of people in the United States lived in poverty in 2024, 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 annually documents the individual effects of many of these policies in its report on poverty in the United States. For example, their latest report shows that, in 2024, the Supplemental Nutritional Assistance Program (SNAP) moved 3.6 million people out of poverty, and housing assistance moved 2.1 million people out of poverty. We release complementary estimates of the combined effects of all taxes and transfers (that are counted in the SPM) on the national poverty rate. We show that, all together, these policies moved more than 35 million people out of poverty in 2024. These analyses document the critical importance of public policies in lowering the national poverty rate, but they do not speak to policies’ effects at the state-level.

In this 50-state analysis, we build on these national-level estimates. We show the impact of tax credits and transfers in reducing state-level poverty rates in recent years. For all states and the District of Columbia, we present the combined total effects of tax credits and transfers that are counted in the SPM, as well as the individual effects of select policies. Following the Census Bureau’s recommendations, we produce these state-level estimates using the latest three years of data from the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) representing 2022 to 2024. Results reflect the average poverty rate and the average policy effects within each state across this time period. These results allow state policymakers and others to quickly see how policies affect poverty within their own states. 

We’ve also made a state-by-state excel file containing the impacts of SNAP on poverty rates available for download. The dataset includes results for each state’s overall population, as well as for children, working-age adults, and older adults.