How do costs and benefits of undocumented immigrant use of services compare to tax contributions they make?
Executive summary
Undocumented immigrants paid nearly $97–100 billion in federal, state and local taxes in 2022 according to the Institute on Taxation and Economic Policy (ITEP) and reporting based on it, with roughly $59.4 billion going to the federal government and more than a third of total tax dollars coming from payroll taxes they cannot claim back [1] [2]. ITEP estimates the roughly 10.9 million undocumented people paid about $8,889 per person in 2022 and that legal work authorization would raise their tax contributions by $40.2 billion annually to $136.9 billion [3] [4].
1. Why the headline numbers matter — taxes paid versus services used
Researchers frame the debate as two separate tallies: revenue flows (taxes paid) and expenditure exposures (public services used). The ITEP study is the most-cited contemporary estimate and finds nearly $97–100 billion in taxes paid by undocumented immigrants in 2022, including $59.4 billion to the federal government [1] [2]. That report also highlights that more than one-third of those tax dollars were payroll taxes earmarked for Social Security and Medicare — programs many undocumented workers cannot access — which changes the policy optics: they fund benefits they largely cannot receive [2].
2. Who pays what — payroll, income, sales and property taxes
Undocumented workers often pay payroll taxes (Social Security and Medicare) through employer withholding or by self-employment tax, and many also file returns using ITINs or — in some cases — borrowed Social Security numbers; these payments show up in federal coffers even when the taxpayer cannot claim program benefits [1] [5]. ITEP’s per‑person figure of $8,889 and state-level breakdowns (for example, $8.5 billion in California) demonstrate that contributions are spread across federal, state and local tax bases [3] [2].
3. The benefits side — which public services are accessed and what costs are borne
Available sources do not provide a comprehensive dollar-for-dollar accounting of the public services used by undocumented immigrants in 2022. ITEP explicitly says its tax study does not attempt to quantify broader economic impacts or fully map service usage and costs [2]. Other reporting notes that undocumented immigrants are largely excluded from many federal transfer programs (e.g., Social Security retirement or Medicare benefits when they lack qualifying records), but they and their U.S.-citizen children can and do access schools, emergency health care, and some state/local services — specifics and net cost estimates are not in the cited sources [5] [2].
4. Policy levers that change the arithmetic
ITEP models a legalization scenario: if all current undocumented immigrants received work authorization, higher wages and better tax compliance would increase annual tax contributions by an estimated $40.2 billion, bringing the total to $136.9 billion [4] [3]. That projection is central to policy debates because it implies that legal status, not just presence, shifts the balance toward higher net revenues [4].
5. Points of consensus and disagreement in the coverage
There is broad agreement across the cited sources that undocumented immigrants do pay substantial taxes and that payroll taxes are a large share of those payments [1] [2] [5]. Disagreement emerges in interpretation: advocacy groups emphasize net-positive fiscal effects and the gains from legalization [6] [2], while fact‑checks and neutral explainers focus on the nuances — that taxes are paid but benefits access differs and that precise net fiscal impacts depend on which services and timeframes you measure [1] [5].
6. What reporting leaves unsaid and why it matters
The available sources do not provide a comprehensive, apples‑to‑apples accounting that subtracts the dollar value of services used from taxes paid to produce a single “net fiscal” number for 2022. ITEP explicitly avoids quantifying all broader economic impacts and cost offsets [2]. That omission matters: advocates and critics cite different summaries (total taxes paid, payroll taxes paid, or modeled legalization gains) to support opposing policy conclusions, so readers should treat any single figure as context‑dependent [4] [2].
7. Bottom line for policymakers and the public
Current reporting establishes that undocumented immigrants are substantial taxpayers who contribute to federal, state and local revenues — roughly $97–100 billion in 2022 by ITEP’s accounting, including $59.4 billion to the federal government and significant payroll tax contributions they generally cannot claim [1] [2]. Whether those tax payments exceed the cost of services used is not settled in the cited materials because comprehensive cost-side accounting is not present in the ITEP report and related coverage; projections show legalization would increase revenues by tens of billions annually [3] [4].