How much do state and local governments collect from undocumented immigrants versus federal taxes?
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Executive summary
Estimates from recent research put total taxes paid by undocumented immigrants at roughly $96.7–$97 billion in 2022 (or about $89.8–$96.7 billion in nearby-year reporting), split between federal and state/local governments: roughly $59–56 billion to the federal level and about $33–37 billion to state and local governments (numbers vary by report and year) [1] [2] [3]. Available sources diverge on exact totals and on the year-to-year figures, but they consistently show federal receipts exceed state and local receipts by a substantial margin [1] [3].
1. What the headline numbers say — near $97 billion in taxes
The Institute on Taxation and Economic Policy (ITEP) produced a widely cited estimate that undocumented immigrants paid about $96.7 billion in federal, state, and local taxes in 2022; Reuters summarized this as “nearly $97 billion” [4] [1]. ITEP’s breakdown reported roughly $59.4 billion flowing to the federal government — including federal income taxes and federal social insurance contributions — and the remainder to state and local governments [1] [4].
2. Federal vs. state/local: federal takes the larger share
Multiple summaries show the federal share is larger: ITEP’s analysis puts tens of billions toward federal income and payroll-type taxes (Social Security, Medicare, unemployment) and a smaller but still sizable portion to state and local revenues. Reuters cites ITEP saying $59.4 billion went to the federal government in 2022 [1]. Other outlets and organizations reporting similar datasets list state and local totals around $33–37 billion for the same period [3] [2].
3. Where the state and local dollars come from
State and local receipts come largely from sales and excise taxes, property taxes (directly if homeowners, indirectly via rent), and state-level payroll and income-like levies. ITEP notes that slightly less than half of state/local tax payments are sales and excise taxes on purchases — about 46 percent in one tabulation — and it lists state-by-state totals, with six states collecting more than $1 billion each (California, Texas, New York, Florida, Illinois, New Jersey) [2] [4].
4. Variation across reports and years — read the fine print
Different groups and write‑ups report similar but not identical totals: ITEP’s 2022-based figure (~$96.7B) appears as “nearly $97B” in Reuters’ fact-check [1] [4]; Americans for Tax Fairness and advocacy outlets cite figures like $96.7B or $89.8B for adjacent years and break the federal/state split slightly differently [3] [5]. These differences stem from methodology choices (which taxes counted, year modeled, assumptions about filing with ITINs or fake SSNs) and timing (2022 vs. 2023 estimates) [2] [6].
5. What changes if undocumented immigrants receive work authorization?
Analysts model substantial increases in tax collections if undocumented immigrants gained legal work authorization: one ITEP-based scenario estimates total contributions would rise by about $40.2 billion per year (to roughly $136.9 billion), with most of the incremental revenue — about $33.1 billion — flowing to the federal government and about $7.1 billion to states and localities [7] [2]. That illustrates how payroll-tax and income-tax liabilities grow when wages and formal employment increase under legalization [7].
6. Caveats, methodological limits and political uses
These numbers are estimates, not direct tallies: ITEP’s work relies on tax-filing patterns (ITIN returns), demographic models, and assumptions about undercounting; Reuters and other outlets characterize the findings as model-based [1] [6]. Advocacy groups (American Immigration Council, Americans for Tax Fairness) highlight economic benefits and may frame the numbers to support policy positions; watchdog outlets and fact-checkers stress that the figures are best estimates subject to methodological choices [5] [3] [1].
7. Bottom line for readers
Available reporting consistently indicates undocumented immigrants contribute tens of billions annually in taxes, with the federal government collecting the larger share (roughly ~$56–59B) and states/localities collecting roughly ~$33–37B in the cited analyses [1] [3] [2]. Exact totals differ by year and methodology; readers should consult the ITEP state-by-state tables and accompanying methodology for precise breakdowns and assumptions before drawing policy conclusions [4] [6].