What evidence exists about how much undocumented immigrants pay in federal, state, and local taxes compared with the public benefits they receive?
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Executive summary
Multiple independent analyses find that undocumented immigrants pay tens of billions of dollars a year in federal, state, and local taxes—estimates cluster around $90–$100 billion for 2022–2023—while being largely barred from many federal benefits those taxes fund, creating a recurring fiscal asymmetry [1] [2] [3]. The size of net fiscal impacts depends heavily on methodology (annual vs lifetime accounting, which programs are counted, and state variation), and competing studies reach different conclusions about whether immigrants are net contributors or net recipients over varied time horizons [4] [1].
1. How much is paid: recent high-end estimates
Analyses from the Institute on Taxation and Economic Policy (ITEP) and similar organizations estimate that undocumented immigrants paid roughly $96.7 billion in federal, state, and local taxes in 2022, with about $59.4 billion going to the federal level and $37.3 billion to state and local governments; ITEP also reports that undocumented tax payments amounted to roughly 26.1% of their incomes in 2022 and about $8.9 billion in tax revenue for every 1 million undocumented residents [1] [5]. The American Immigration Council reports a comparable total for 2023—about $89.8 billion in taxes, split roughly $55.8 billion federal and $33.9 billion state and local—underscoring convergence among multiple non‑governmental estimates [2].
2. What kinds of taxes are paid and who pays them
Undocumented workers often pay payroll taxes (Social Security and Medicare) through wage withholding or self‑employment taxes, and they also contribute to federal income, state income, sales, and property taxes when applicable; many file taxes using ITINs or, in some cases, borrowed SSNs, producing measurable revenue even though they are not eligible for many benefits [3] [6] [7] [8]. ITEP and reporting note that social insurance programs capture more than a third of the tax contributions, including roughly $25.7 billion to Social Security in one analysis, even though most undocumented workers are barred from collecting those benefits [1] [6].
3. What benefits are received—and what is excluded
Most federal safety‑net and refundable tax benefits are off‑limits to people without lawful status: undocumented immigrants are generally ineligible for Social Security retirement benefits and Medicare, and many cannot claim refundable credits like the Earned Income Tax Credit (EITC), making their tax contributions net subsidies to programs they cannot access [3] [8] [6]. Recent administrative moves and proposed Treasury rules to treat refundable tax credits as “federal public benefits” for immigration purposes could further complicate whether immigrants claim those credits or face immigration consequences, shifting both take‑up and reporting dynamics [9] [10].
4. Net fiscal impact: methodology matters and studies disagree
Whether undocumented immigrants are net contributors depends on the lens: annual accounting focused on taxes paid versus public services consumed tends to show positive net tax revenue at the state and local level in many places, while lifetime analyses that model use of education, health, and retirement benefits over decades produce more varied results; the Manhattan Institute’s lifetime‑focused work finds that immigrants overall can contribute slightly more in taxes than they receive over lifetimes but emphasizes that outcomes vary sharply by education and admission category [4]. ITEP highlights that a substantial share of tax payments funds programs the payers cannot access, which is a different metric than lifetime net fiscal balance and explains part of the disagreement among studies [1] [4].
5. Political framing, policy changes, and the limits of available evidence
Reporting reveals that analyses are used to support diverging agendas—advocacy groups emphasize fiscal contributions to argue for inclusion, while some policy actions and statements have sought to restrict benefit access and label credits as public benefits to deter use by noncitizens [5] [11] [12]. The empirical record is robust on tax payment magnitudes but limited in producing a single, uncontested “net cost” figure because of methodological choices, state heterogeneity, and evolving policy rules that themselves change behavior and eligibility [1] [2] [11].
Conclusion
The best available evidence shows undocumented immigrants pay substantial taxes—on the order of roughly $90–$100 billion annually in recent years—yet remain largely excluded from many of the federal benefits those taxes help finance, producing a measurable fiscal contribution that is politically consequential; whether they are net costs or net benefits to government depends on the accounting frame, the programs counted, and assumptions about long‑term outcomes [1] [2] [4]. The debate is not about whether taxes are paid—the sources agree they are—but about how to measure and interpret net fiscal effects and how policy changes will shift both payments and access going forward [7] [9].