The 2024 tax payment picture for undocumented immigrants
Undocumented immigrants paid an estimated $96.7 billion in federal, state, and local taxes in 2024, according to research from the Institute on Taxation and Economic Policy. This figure includes income taxes, payroll taxes (Social Security and Medicare), sales taxes, and property taxes. The amount represents a significant portion of total tax revenue, though exact figures vary depending on the data source and methodology used.
Most undocumented immigrants pay taxes through payroll deductions when they work for employers who withhold wages, or through self-employment tax filings. Many also pay sales and property taxes as renters or homeowners. The 2024 data reflects continued participation in the tax system despite legal status barriers.
Key Takeaways
- Undocumented immigrants contributed approximately $96.7 billion in combined federal, state, and local taxes during 2024.
- Payroll taxes (Social Security and Medicare withholding) make up the largest share of tax payments from this population.
- Many undocumented workers file income tax returns using Individual Taxpayer Identification Numbers (ITINs) issued by the IRS.
- State and local tax contributions vary significantly by location, with higher amounts in states with larger undocumented populations.
How payroll taxes work for undocumented workers
When an undocumented immigrant works for an employer that runs payroll through standard channels, federal income tax, Social Security tax (6.2%), and Medicare tax (1.45%) are typically withheld from each paycheck. The employer also contributes a matching amount to Social Security and Medicare. These deductions happen automatically, regardless of immigration status.
The Social Security Administration reports that payroll taxes from workers without valid Social Security numbers are deposited into a separate account called the "Earnings Suspense File." In 2024, this account held hundreds of billions of dollars in accumulated taxes. Some of these funds eventually match to valid accounts when workers obtain legal status or when records are corrected, but much remains unmatched.
Income tax filing with an ITIN
The Internal Revenue Service issues Individual Taxpayer Identification Numbers (ITINs) to people who cannot obtain a Social Security number but have a tax filing requirement. An undocumented immigrant can use an ITIN to file a federal income tax return, claim refunds, and report self-employment income. The IRS does not share ITIN information with immigration enforcement agencies.
In 2024, hundreds of thousands of ITIN filers submitted returns reporting wages, self-employment income, and other earnings. Many received refunds through the Earned Income Tax Credit (EITC) or Child Tax Credit, even though they are ineligible for most federal benefits. The EITC refund is available to ITIN filers who meet income and work requirements.
State and local tax contributions
Undocumented immigrants pay state income taxes in states that do not require a Social Security number to file, and they pay sales tax on purchases in all states. Property taxes are paid by undocumented homeowners and are sometimes collected from renters through landlords. The Institute on Taxation and Economic Policy estimates that state and local taxes from undocumented immigrants totaled roughly $18.5 billion in 2024.
States with the largest undocumented populations—California, Texas, Florida, and New York—collected the highest dollar amounts. However, the tax rate as a percentage of income is often higher for lower-income undocumented workers, since sales and property taxes take up a larger share of their earnings than for higher-income households.
Why the numbers vary between sources
Different organizations estimate undocumented immigrant tax payments using different methods. Some count only documented tax filings; others use population estimates combined with average income data. The Census Bureau, the IRS, the Social Security Administration, and independent research organizations all publish different figures because they measure different things or use different baseline assumptions about the undocumented population size.
The $96.7 billion figure from the Institute on Taxation and Economic Policy is one widely cited estimate, but other researchers have published estimates ranging from $70 billion to over $130 billion depending on assumptions about population size, average earnings, and which taxes are included. No single "correct" number exists; the range reflects genuine uncertainty about the total undocumented population and their average incomes.
What happens to taxes paid without a valid Social Security number
Payroll taxes withheld from workers using false or invalid Social Security numbers go into the Earnings Suspense File rather than toward an individual's Social Security account. These funds do not earn the worker credit toward future Social Security benefits unless the account is eventually matched to a valid number. If a worker later obtains legal status and a valid Social Security number, some past earnings may be credited, but the process is not automatic.
Income taxes paid through ITIN filing are treated like any other federal income tax payment. They go into the general Treasury and fund federal operations. ITIN filers do not receive Social Security credit for these payments, and they cannot draw on these taxes later as benefits unless they become may be able to access through other means (such as obtaining a work visa or green card).
The relationship between tax payment and immigration status
Paying taxes does not change immigration status or create a path to legal residency. The IRS and the Social Security Administration do not share information with U.S. Immigration and Customs Enforcement (ICE) for the purpose of enforcement. However, tax records can be subpoenaed in legal proceedings, and filing a tax return creates a paper trail that could theoretically be used in other contexts.
Some undocumented immigrants choose not to file returns out of concern for their legal status, even though the IRS has stated it does not use tax data for immigration enforcement. Others file regularly. The decision to file is personal and depends on individual circumstances, risk tolerance, and access to tax preparation resources.
Frequently Asked Questions
Do undocumented immigrants have to pay taxes?
Yes. Anyone living and working in the United States is required to file a federal income tax return if their income exceeds the filing threshold, regardless of immigration status. State income tax requirements vary by state. Payroll taxes are withheld automatically by employers.
Can an undocumented immigrant get a refund?
Yes, if they file using an ITIN and meet the requirements for refundable credits like the Earned Income Tax Credit or Child Tax Credit. The IRS processes ITIN returns the same way it processes other returns. Refunds are issued by check or direct deposit.
Will filing taxes affect my immigration case?
Filing a tax return does not change your immigration status or create a legal pathway to residency. The IRS does not share tax information with immigration enforcement. However, tax records are public documents that could be subpoenaed in legal proceedings. Consult an immigration attorney if you have concerns specific to your situation.
Where does the money from undocumented immigrants' taxes go?
Federal income and payroll taxes go into the U.S. Treasury and fund federal programs, defense, infrastructure, and other government operations. State and local taxes fund schools, roads, police, and other services in the state or locality where the taxes were paid. Payroll taxes withheld without a valid Social Security number go into the Earnings Suspense File.
How many undocumented immigrants filed taxes in 2024?
Exact numbers are not published by the IRS, but estimates suggest several million ITIN returns are filed annually. The total number of undocumented immigrants paying taxes through payroll withholding is higher, since not all file individual returns. Estimates vary depending on the source and methodology.