How much do undocumented immigrants pay in taxes every year?
Executive summary
The best current, peer-reviewed estimates put annual tax payments by undocumented immigrants in the United States at roughly $96.7 billion in 2022, split between $59.4 billion to the federal government and $37.3 billion to state and local governments, according to the Institute on Taxation and Economic Policy (ITEP) [1] [2]. Other reputable compilations and analyses describe similar totals—near $90–100 billion—while noting methodological differences, the role of ITIN filers, and that legalization or work authorization would materially increase those payments [3] [4] [2].
1. How that $96.7 billion number was calculated and what it includes
ITEP’s estimate aggregates federal, state, and local tax types — income, payroll, sales, excise, and property taxes — by modeling undocumented taxpayers’ incomes across income brackets and applying effective tax rates adjusted for demographic and administrative realities; ITEP reports $59.4 billion in federal taxes and $37.3 billion in state and local taxes in 2022, with state/local collections split roughly 46% sales/excise ($15.1B), 31% property ($10.4B) and 21% personal/business income taxes ($7B) [1] [2].
2. Why other sources give slightly different totals and the role of ITIN filers
Independent commentators and research centers place totals in the same neighborhood—American Immigration Council cites $89.8 billion in 2023 for immigrant‑led households and the Tax Policy Center summarizes estimates “nearly $100 billion” for 2022—differences trace to year of analysis, whether household versus individual measures are used, and how models treat undocumented workers’ reported versus unreported income and ITIN returns; the IRS had about 5.4 million active ITINs as of January 2021 and ITIN-filed tax returns in 2019 showed nearly $6 billion in reported federal tax liability, figures that feed into broader estimates [3] [4] [5].
3. The counterfactual: how legalization would change tax receipts
All of the major studies cited note a substantial “if legalized” uplift: ITEP projects that granting work authorization to current undocumented immigrants would raise annual tax contributions by about $40.2 billion — to roughly $136.9 billion — primarily because wages and formal employment would rise and administrative barriers to compliance would fall [2] [6].
4. Geographic distribution and illustrative state totals
The tax contributions are concentrated where undocumented populations live and work: ITEP’s state breakdown shows six states each raising more than $1 billion from undocumented residents in 2022 — led by California ($8.5B), Texas ($4.9B), and New York ($3.1B) — and includes per‑person averages that advocacy groups sometimes cite to contextualize the aggregate totals [7] [8].
5. Caveats, methodological limits, and competing agendas
Estimates rest on models with known limits—unrecorded cash wages, differing use of ITINs, and variations in eligibility for tax credits can bias totals—and ITEP and allied organizations explicitly warn their figures do not capture broader economic ripple effects that likely raise the fiscal contribution further [1] [2]; readers should also note source perspectives—ITEP and the American Immigration Council are research and advocacy organizations that frame findings to inform policy debates, while the Tax Policy Center provides explanatory context; conservative outlets and some older studies have cited much smaller figures or emphasized costs instead, but those are not the current consensus among fiscal researchers [2] [3] [4] [9].
6. Bottom line — answer to the question “How much do undocumented immigrants pay in taxes every year?”
Using the most recent comprehensive accounting available, undocumented immigrants paid roughly $96.7 billion in federal, state, and local taxes in 2022, with reasonable alternative estimates clustering between about $90 billion and $100 billion depending on methodology; this number is expected to rise significantly under scenarios that grant work authorization or otherwise raise reported earnings, and it excludes secondary economic effects that would likely boost public revenue estimates further [1] [2] [3] [4].