What is the estimated annual tax revenue from illegal aliens in the US?

1. What the leading recent estimates say — a near-$100 billion figure

The most-cited recent national study by the nonpartisan Institute on Taxation and Economic Policy (ITEP) estimates that undocumented immigrants paid nearly $97 billion in federal, state, and local taxes in 2022; that study breaks out about $59.4 billion to the federal government (including income and payroll-related contributions) and roughly $37.3 billion to state and local governments ^{[1] [2] [3]}. Multiple policy centers and state briefs repeat the ITEP per‑million scaling: about $8.9 billion in tax revenue for every 1 million undocumented residents ^{[3] [5]}.

2. Why numbers differ — methodology and assumptions matter

Estimates diverge because analysts use different baseline populations, tax‑filing behavior assumptions, and which taxes they count. ITEP’s approach relies on IRS data for taxpayers using Individual Taxpayer Identification Numbers (ITINs) and modeling to estimate payroll and indirect tax payments; it also models how legalization or work authorization would change revenue ^{[2] [3]}. By contrast, some advocacy groups and “cost” studies subtract different categories of taxes or emphasize public spending offsets and therefore report much lower net tax receipts attributed to undocumented immigrants (for example, FAIR’s study differentiates gross fiscal cost vs. taxes received and reports “just under $32 billion” in taxes paid as part of a fiscal‑burden calculation) ^[4].

3. What portions of taxes are being paid — federal vs. state/local and payroll taxes

ITEP’s decomposition shows a large share of payments go to the federal level — including federal income taxes and federal social insurance (Social Security, Medicare) — with a cited federal contribution of about $59.4 billion in 2022; state and local receipts are estimated at about $37.3 billion ^{[1] [2]}. Analyses also note undocumented workers often pay payroll taxes (Social Security and Medicare) even when ineligible to claim benefits, and many file using ITINs ^{[1] [6]}.

4. How legalization or work authorization would change revenue

ITEP models a scenario where work authorization is provided to all current undocumented immigrants and estimates tax contributions would rise by about $40.2 billion annually — from roughly $96.9 billion to about $136.9 billion — with most of that additional revenue ($33.1 billion) flowing to the federal government ^[2]. Advocacy groups also cite wide potential ranges ($40 billion to $137 billion) of added revenue under different regularization scenarios, reflecting divergent assumptions about wage increases and employment formalization ^[7].

5. Political and institutional context that shapes reporting

Different organizations bring implicit perspectives: ITEP describes itself as a non‑partisan tax policy organization and frames its work as quantifying contributions in order to inform policy; groups emphasizing “fiscal burden” (e.g., FAIR) frame the same phenomenon in terms of net costs to taxpayers, subtracting tax receipts from program spending to reach a different policy conclusion ^{[3] [4]}. These framing choices affect which figures are emphasized in public debate ^{[4] [3]}.

6. What reporting does not settle — caveats and gaps in available sources

Available sources do not mention a single definitive official tally recognized across agencies; instead, they present modeled estimates that depend heavily on underlying data choices ^{[2] [1]}. Sources note limitations such as incomplete capture of economic ripple effects (which might increase estimated revenue) and the sensitivity of results to population counts and tax‑filing assumptions ^{[3] [5]}. Claims that “undocumented immigrants don’t pay taxes” are explicitly contradicted by IRS mechanisms (ITINs) and by ITEP/Reuters fact checks showing substantial tax payments ^[1].

7. Practical takeaway for readers

If you need a working figure drawn from mainstream tax‑policy research, use the ITEP headline: roughly $96–100 billion per year in 2022–2023, with about $59 billion estimated to the federal government and about $37 billion to state and local governments ^{[1] [2] [3]}. If you are comparing studies, pay attention to each report’s population baseline, which taxes are counted, whether spending offsets are included, and any policy agendas influencing presentation ^{[4] [3]}.