Introduction. Clarifying the bidirectional associations between caregiver psychological distress and child problematic behaviors is important to further the understanding of family dynamics and its challenges. Despite, little attention is paid to clarifying and comparing the reciprocal associations between the poor and the nonpoor. This study aims to add knowledge by addressing this research gap. Such insights are crucial for guiding interventions to address unique challenges in child behavior and caregiver psychological distress experienced by poor and non-poor families. Method. This study conducts analyses using a multi-group cross-lagged panel model. Data is drawn from the 2015, 2017, and 2019 Main Study, along with the 2014 and 2019 Child Development Supplement from the Panel Study of Income Dynamics, tracking 460 adolescents from 2014 (Mage=10.90, SD = 0.87; 53.3% female) to 2019. Results. Results show that there are reciprocal associations between caregiver psychological distress and adolescent internalizing behaviors in poor families, but not in non-poor families. In poor families, adolescent’s earlier internalizing behaviors and their parent’s psychological distress are similarly influential for later internalizing behaviors. The combined effect of both is stronger than either alone. Conclusion. Findings suggest the importance of tailoring family-based interventions for poor and non-poor families. For non-poor families, results suggest the importance of providing mental health support for parents given its association with adolescent behavioral issues. For poor families, they need not only financial assistance but also family-based interventions that simultaneously target adolescents and their caregivers, rather than either alone, to maximize positive changes to adolescent behavioral development.