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Fact check: Can undocumented immigrants claim tax credits or deductions on their tax returns?
Executive Summary
Undocumented immigrants can and do pay federal, state, and local taxes using an Individual Taxpayer Identification Number (ITIN), and they are generally eligible to claim certain tax deductions and some tax credits, but they are barred from federal health insurance subsidies under the Affordable Care Act and from Medicaid eligibility. The evidence shows a distinction between tax filing/credit access and eligibility for specific public benefits, and worries about IRS data-sharing with immigration authorities can suppress filing and claiming behavior [1] [2] [3]. Recent studies quantify substantial tax contributions that complicate political narratives about access and entitlement [4] [5].
1. What people claim — the political story driving confusion
Advocates and critics often conflate tax filing with benefit eligibility, producing misleading headlines about whether undocumented immigrants "get" tax credits or public health subsidies. The narrative driving recent disputes centers on the Affordable Care Act premium subsidies and Medicaid; multiple fact-checks note that undocumented immigrants are excluded from ACA exchanges and Medicaid, so extending Marketplace premium tax credits would not directly benefit them [2] [6]. Opponents frame proposed policy moves as benefiting undocumented people, while proponents emphasize cost protections for low- and middle-income citizens—both positions use tax terminology that blurs technical distinctions [7] [6].
2. The fiscal reality — undocumented taxpayers pay substantial taxes
Independent studies document large tax contributions from undocumented residents: nearly $97 billion paid in federal, state, and local taxes in 2022, with $59.4 billion to the federal government and $37.3 billion to state and local coffers. This data demonstrates that tax payment and tax file status are not synonymous with immigration status or benefit eligibility, and that many undocumented people participate in the formal tax system via ITINs [4] [1]. The 2025 restatement of these figures underscores that states vary widely in effective tax burdens and that tax contributions are a material factor in policy debates [5].
3. Tax filing and legal mechanics — ITINs and access to deductions
Undocumented workers who lack Social Security numbers can obtain an ITIN to file returns and thereby claim allowable deductions and many credits available to filers. Filing with an ITIN establishes tax liability and access to routine tax advantages, and the literature notes that this mechanism is how most undocumented pay their share [1]. However, the ability to claim specific refundable or nonrefundable credits depends on IRS rules that vary by credit; the public discourse often overstates or understates which credits undocumented filers can legally claim, feeding confusion [1] [2].
4. Which tax credits are at stake — eligibility nuances matter
Fact-checking pieces focused on health care subsidies emphasize that premium tax credits for Marketplace coverage and Medicaid are explicitly unavailable to undocumented immigrants, so proposals to change those programs would not expand such benefits to this population without separate immigration policy changes [2] [6]. Meanwhile, other tax credits aimed at low- and middle-income workers are central to debates about affordability for citizens and legal residents; claims that extending certain credits would "benefit undocumented immigrants" rely on conflating unrelated tax code elements [7] [2].
5. Behavioral effects — data-sharing and fear reduce filing and claims
Legal challenges and reporting about IRS data-sharing with ICE create real-world chilling effects on filing. Lawsuits and explainers document concerns that tax information could be used for immigration enforcement, which deters some undocumented taxpayers from filing or from claiming refundable credits they legally could receive [3] [8]. This dynamic both reduces tax revenue and complicates assessments about who claims what on returns; official statistics undercount participation if fear suppresses filings [8] [3].
6. Competing agendas and the policy trade-offs
Political actors selectively highlight tax payment data or benefit exclusions to advance agendas: one side cites large tax contributions to argue for inclusion and recognition, while the other points to statutory exclusions from federal health credits to oppose policy shifts. Both arguments are fact-based but incomplete without acknowledging administrative realities like ITIN access and data-sharing fears, and both rely on the same empirical studies cited above to support opposing policy choices [4] [7] [3].
7. Bottom line for taxpayers and policymakers
Undocumented immigrants can file taxes with an ITIN and are legally required in many cases to pay taxes; they can claim many deductions and certain credits available to filers, but federal health-related premium tax credits and Medicaid remain off-limits unless immigration status changes. Policy debates should distinguish tax filing mechanics from program eligibility and account for behavioral deterrents caused by data-sharing and enforcement fears, since those factors materially affect both tax revenue and the social services landscape [1] [2] [8].