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How much did undocumented immigrants pay in federal payroll taxes in 2023 or 2022?
Executive Summary
Undocumented immigrants paid tens of billions in federal payroll taxes in recent years, with leading estimates centering around $33.9 billion in payroll taxes for 2022 and about $43 billion in payroll taxes in 2023, though total federal tax contributions vary across studies [1] [2]. Differences reflect varying definitions, methodology, and data sources; analysts warn that policy changes and data‑sharing agreements could materially reduce compliance and thus future payroll‑tax receipts [2] [3].
1. Numbers that catch the eye: headline tallies and what they mean
Multiple recent studies converge on the conclusion that undocumented immigrants contribute substantial payroll taxes to federal programs. The Institute on Taxation and Economic Policy’s work is frequently cited for a 2022 tally showing $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance taxes, summing to $33.9 billion in federal payroll taxes in 2022 [4] [1]. A separate 2023 estimate from The Budget Lab places total federal taxes paid by unauthorized immigrants at $66 billion, with roughly $43 billion attributed to payroll taxes that year [2]. Both figures point to meaningful payroll‑tax contributions that fund Social Security, Medicare and other programs, despite legal barriers to benefit access for many payers.
2. Why totals differ: methodology, definitions and data gaps
Estimates diverge because organizations use different definitions, datasets, and modeling choices. Some studies report federal-only taxes while others combine federal, state and local taxes — for example, one analysis reports nearly $96.7–$100 billion in total taxes (federal, state, local) in 2022, with $59.4 billion going to the federal government in that construct [5] [4]. Researchers adjust for nonfilers, substitute Individual Taxpayer Identification Numbers, and apply effective tax‑rate models to American Community Survey microdata; these choices alter payroll‑tax estimates. Counting payroll taxes paid under false or valid SSNs versus ITIN filings, and estimating the share of workers who are undocumented, are principal sources of variance [4] [6].
3. Compliance, filing behavior and the role of policy
The share of undocumented workers who actually pay payroll taxes matters as much as the aggregate figures. The Congressional Budget Office has estimated that 50–75% of unauthorized immigrants pay some combination of federal income and/or payroll taxes, a range echoed in multiple analyses [2]. Reports note that many undocumented households file using ITINs and that fear or policy changes can suppress filing; the newly reported Treasury‑DHS/IRS‑ICE data‑sharing proposals and related enforcement measures are forecast to reduce compliance, producing estimates of hundreds of billions in lost revenue over a decade in some projections [3] [2]. Policy and perceived risk materially influence the tax base in these studies.
4. Who’s reporting these numbers and what are their perspectives?
The estimates come from a mix of academic labs, advocacy groups, and tax‑policy nonprofits, each with different emphases. The Budget Lab and the Yale‑linked analyses highlight payroll‑tax contributions and warn about compliance effects from data sharing [2]. The Institute on Taxation and Economic Policy systematically models tax liabilities and finds $33.9 billion in payroll taxes in 2022 while placing larger totals at the federal level near $59.4 billion for 2022 depending on definitions [1] [4]. The American Immigration Council emphasizes household tax contributions and the disparity between taxes paid and benefits received [7]. Each organization’s priorities — fiscal modeling, advocacy on immigrant inclusion, or procedural transparency — shape framing and emphasis.
5. Bottom line and what’s missing from public figures
The evidence establishes that undocumented immigrants paid tens of billions of dollars in federal payroll taxes in 2022–2023, with credible midpoint figures around $34 billion [8] and $43 billion [9] for payroll taxes alone, embedded in broader federal‑tax totals of roughly $59–66 billion depending on the study [1] [2]. Yet uncertainty remains: precise totals hinge on estimates of population size, work patterns, use of ITINs versus SSNs, and behavioral responses to enforcement and data‑sharing policies. Policymakers weighing reform or enforcement changes should account for both the fiscal contributions documented here and the potential for large revenue swings if compliance declines [3] [4].