Do illegal immgrant pay taxes
Executive summary
Yes — people living and working in the United States without legal authorization do pay substantial federal, state and local taxes, through payroll withholding, income tax filings using Individual Taxpayer Identification Numbers (ITINs), and consumption- and property-based levies; researchers estimate these contributions totaled roughly $96–97 billion in 2022, though precise totals are inherently uncertain because the IRS does not record legal status on tax returns [1] [2] [3].
1. How undocumented people actually pay: withholding, ITINs, sales and property taxes
Undocumented workers can and do pay federal payroll taxes withheld from wages, file income tax returns using ITINs when they lack Social Security numbers, and pay sales and property taxes just like other consumers and renters, which together generate billions in revenue—an IRS-facing accounting reality emphasized by the Bipartisan Policy Center, the Tax Policy Center, and the IRS itself [4] [2] [5].
2. The scale: nearly $97 billion and where it goes
Multiple recent analyses converge on a ballpark: the Institute on Taxation and Economic Policy (ITEP) estimated undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022, with roughly $37.3 billion flowing to state and local governments and the balance to federal coffers; other organizations reach similar totals for 2023 and 2024 studies, underscoring that the contribution is sizable and geographically concentrated in states like California, Texas and New York [1] [6] [7].
3. Why they may “overpay” relative to benefits received
A quirk of the system is that many undocumented workers contribute to payroll taxes that finance Social Security and Medicare but are ineligible for those retirement or Medicare benefits; researchers note undocumented households are often barred from federal tax credits like the Earned Income Tax Credit or Child Tax Credit even when they pay in, which can make their net fiscal receipt lower than their tax contributions [2] [8] [3].
4. Measurement limits and methodological caveats
Estimates rely on indirect methods—matching ITIN filings, wage data, and Census-based population counts—because the IRS does not ask filers their immigration status; therefore figures are model-based and incorporate assumptions about filing rates, use of ITINs versus false SSNs, and spending patterns, meaning the $96–97 billion number is an informed estimate rather than a precise ledger entry [3] [1].
5. Compliance, evasion, and the reality of fake or borrowed SSNs
Some unauthorized workers use fake or borrowed Social Security numbers to get jobs and have taxes withheld (which may be paid into Social Security accounts they can’t access later), while others file legitimately with ITINs; fact-checkers and tax analysts note both behaviors occur, complicating any simple claim that “undocumented people don’t pay taxes” [9] [4] [5].
6. Policy implications and competing narratives
Advocates and researchers argue legalizing work authorization would likely raise reported earnings and tax compliance—boosting revenue—while critics sometimes use anecdotes about benefit ineligibility to claim net fiscal costs; both points are grounded in evidence: legalization tends to increase wages and formal tax payments (per ITEP and advocacy analyses), and current law does bar many undocumented contributors from certain federal benefits [1] [2] [6].
7. What the sources agree and where disagreement remains
Across IRS guidance, academic work, ITEP, Tax Policy Center, American Immigration Council and reputable fact-checkers, the consensus is clear that undocumented residents do pay significant taxes; the principal disagreement is about magnitude and distributional effects—estimates vary by methodology and by whether indirect economic effects are counted—so “do they pay taxes?” is answered decisively yes, while “what is the exact fiscal net impact?” remains debated and model-dependent [5] [1] [7] [9] [3].