The U.S. Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. If a family’s total income is less than the family’s threshold, then that family and every individual in it is considered in poverty. 

The official poverty thresholds do not vary geographically, but they are updated for inflation using Consumer Price Index, the most widely accepted index of inflation. The Consumer Price Index is generated by the Bureau of Labor Statistics to measure average changes in the prices of goods and services consumed by a typical family.

The official poverty definition refers to money income before taxes and does not include capital gains or non-cash benefits (such as public housing, Medicaid, and food stamps). Because the primary function of the poverty thresholds, as a statistical yardstick, is to classify only the neediest sectors of the population, they are a modest measure of need and do not adequately indicate the total need for assistance.

The National Poverty Center at The University of Michigan Gerald R. Ford School of Public Policy is a good source of information on poverty and how it has changed over time.

Each year, the federal government calculates the minimum amount of money required by families to meet these basic needs. The resulting calculation is what is commonly referred to as the "poverty line."

The following information is provided from the Low-Income Home Energy Assistance Program (LIHEAP) Clearinghouse.

2009/2010 HHS Poverty Guidelines For all states (except Alaska and Hawaii) and for the District of Columbia
For family units with more than 8 members, add $3,740 for each additional person at 100% of poverty; $4,114 at 110 %; $4,675 at 125%; $5,610 at 150%; $6,545 at 175%; $6,919 at 185% and $7,480 at 200% of poverty.