Fact check: Do undocumented immigrants pay Social Security and Medicare taxes and how much do they contribute annually?

1. Why the numbers matter: a near-$97 billion contribution that surprises many readers

The headline finding from multiple analyses is that undocumented immigrants collectively paid $96.7 billion in federal, state, and local taxes in 2022, which included an estimated $25.7 billion for Social Security and $6.4 billion for Medicare. That total frames the fiscal footprint of undocumented workers and highlights that a substantial share of their tax dollars funds programs they typically cannot access because of immigration status. The Institute on Taxation and Economic Policy’s synthesis of tax filings and payroll estimates underpins the $96.7 billion figure and is repeatedly cited in contemporary reporting and fact checks, making the aggregate contribution a central datum in debates about immigration and public finance ^[3].

2. How undocumented workers actually pay payroll taxes: ITINs, SSNs, and payroll withholding

Undocumented workers pay payroll taxes in several ways: through employers withholding Social Security and Medicare taxes from paychecks, by filing returns using an Individual Taxpayer Identification Number (ITIN), or by using Social Security numbers—sometimes valid, sometimes borrowed or false. The IRS issues ITINs to allow tax filing even when the filer is not eligible for Social Security benefits, and historical IRS data and analyses show ITIN filers and undocumented workers have paid billions in payroll taxes annually. This mechanism explains why workers who cannot claim Social Security benefits nonetheless still fund the systems that would otherwise benefit lawful workers ^{[4] [1] [2]}.

3. The apparent paradox: contributing to programs without access to benefits

A persistent point of contention is that undocumented immigrants often pay into Social Security and Medicare but are ineligible for their benefits under current rules. Analysts highlight that more than a third of the tax dollars collected from undocumented workers go toward funding social insurance programs from which they are largely barred. This creates a policy and ethical flashpoint: critics see unfairness in paying into programs without access, while others view the contributions as evidence that legalizing workers would both expand the tax base and enable rightful access to earned benefits. The numbers drive policy debates about legalization, eligibility, and fiscal fairness ^{[3] [2]}.

4. Estimates of additional revenue from legalization: a projected $40 billion boost

Reports estimate that granting work authorization to undocumented immigrants would increase tax contributions significantly—an estimated $40.2 billion per year in additional tax revenue. That projection attributes gains to higher wages, more formal employment, and improved tax compliance, with about $33.1 billion flowing to the federal government and $7.1 billion to states and localities under the scenario modeled. Proponents of legalization use these figures to argue for fiscal benefits of legalization, while opponents question assumptions about wage gains and labor-market effects. The projection underscores the sensitivity of tax revenue to policy choices on work authorization ^{[5] [3]}.

5. Sources, reporting differences, and methodological caveats worth noting

Multiple contemporary sources—fact checks, media reporting, and policy institutes—consistently cite similar totals for 2022, but differences stem from methodology: which tax categories are included, how undocumented populations are estimated, and assumptions about underreporting. Reports converge on the payroll-tax figures for Social Security and Medicare (roughly $25.7 billion and $6.4 billion), yet estimates for total taxes vary slightly around the $96–97 billion range. Fact-checkers emphasize that the use of borrowed Social Security numbers complicates tracking and that ITIN data only captures those who file, meaning actual contributions could be under- or over-estimated depending on modeling choices ^{[1] [2] [3]}.

6. What this means for the public debate and policy choices going forward

The evidence shows undocumented workers materially contribute to Social Security and Medicare financing today, while remaining largely ineligible for benefits—an empirical foundation for competing policy arguments. Advocates for legalization stress the projected $40 billion annual revenue gain and improved worker protections; skeptics raise questions about labor-market impacts and model assumptions. The consistent estimates in recent analyses provide a factual baseline for discussions: policymakers can cite concrete dollar figures when weighing legalization, enforcement, or benefit-eligibility changes, but they should also acknowledge methodological limits and the political trade-offs those numbers imply ^{[3] [5] [2]}.