If you are 'very poor' you are eligible for WIC. The purpose of WIC is to ensure that babies get sufficient nutrition, even if their parents can't afford it.
And if you were 'very poor' when baby was born, why didn't you breastfeed. Breastmilk IS free. (And WIC would have offered support and advice for that too.)
AND .. you need a better pediatrician -- you NEVER dilute formula. He's eating all the time because he's not getting enough to eat! (If he's "really" getting 5 ounces of formula every 2-3 hours, and is sleeping most the night, that's ... what ... 6-7 feeds? 35 ounces? Nowhere near too much.
And he doesn't need teeth to eat solids.
You are probably also eligible for food stamps and free school lunches for your 5 year old.
EDIT: I think you need to find money for a tax consultant...
Income cut-off for WIC for a family of 4 is 41,348/year. If you make 100 over that, with 2 kids, you are eligible for the EIC AND with 2 child tax credits, 4 general deductions of 3700 each and a standard deduction of 11,600 (I just did my taxes...), you should be paying virtually NO federal income tax ... certainly not 50%. (And yes, if you're making 41,000/year, you are making far more than you would get on welfare.)
But ... at the end of the day, you chose to have children. You need to do whatever you have to do to find the money to feed them CORRECTLY ... and that doesn't mean whole milk instead of formula for a 9 month old.
(Oh, and unless you were on chemotherapy when baby was born, or HIV meds, it's VERYunlikely that you were on any sort of medication that made breastfeeding impossible.)