How much do state and local governments collect from undocumented immigrants versus federal taxes?

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]}.