Ahead of Tax Day, it’s always necessary to highlight the tax contributions that immigrants—including those without legal immigration status—make to the local, state, and federal government every year. Their robust contributions help sustain programs like Medicare and Social Security, fund our public schools, libraries, and police departments, and boost our overall economy.
“Analysis of the 2021 American Community Survey shows that immigrant-led households paid $524.7 billion in total taxes in 2021, a slight increase since 2019,” Immigration Impact said last year. “This includes $346.3 billion in federal income taxes, and $178.4 billion in state and local taxes.” The research showed that while immigrants make up 13.6% of all U.S. households, their tax contributions make up nearly 16% of total tax revenues received by the federal government in 2021.
Despite cynical myths, the fact is that undocumented immigrants make significant tax contributions, including paying into federal programs that they can never access unless they can adjust their immigration status. Many of these essential workers are the backbone of industries like construction and agriculture, working to build homes and businesses, repair roads and bridges, and put food on our tables.
In 2021 alone, undocumented-led households “contributed $30.8 billion in total taxes, including $18.6 billion in federal income taxes and $12.2 billion in state and local taxes, based on data from the American Community Survey,” Immigration Impact said in another report last year. Undocumented workers also contribute billions to Social Security, paying an estimated $13 billion into the system annually. The Social Security Administration (SSA) estimated “that unauthorized workers have paid a whopping $100 billion into the fund over the past decade,” Vice reported in 2014.
Undocumented immigrants have been critical in helping sustain the fund, as acknowledged by the SSA itself. “We estimate that future years will experience a continuation of this positive impact on the trust funds,” SSA officials said in 2013. So rather than “take” benefits, as critics of immigration baselessly allege, undocumented immigrants are actually subsidizing you and me.
These workers’ tax contributions are also “critical to the viability of public health programs like Medicare and Medicaid,” the National Immigration Forum said in 2022. “Between 2000 and 2011, undocumented immigrants generated a $35.1 billion surplus in the Medicare Trust Fund.” Immigrants with Temporary Protected Status (TPS) and Deferred Action for Childhood Arrivals (DACA) are also significant contributors to Social Security and Medicare, cumulatively contributing billions through their tax dollars every single year. DACA recipients pay more than $2 billion annually, while TPS holders pay nearly $700 million annually.
Many undocumented immigrants pay their taxes through an IRS-issued Individual Taxpayer Identification Number (ITIN), which also creates a paper trail that could be helpful should they become eligible to adjust their immigration status. Updating our outdated immigration system by ensuring that millions of undocumented workers who are already contributing to their communities and states can become full Americans on paper would be a massive boon to all U.S. workers and the economy.
Research from the Center for American Progress finds that a pathway to citizenship for all undocumented immigrants currently in the U.S. “would boost U.S. gross domestic product (GDP) by a cumulative total of $1.7 trillion over ten years and create 438,800 new jobs,” as well as raise the annual wages for all U.S. workers by hundreds of dollars.
And when undocumented immigrants are particularly vulnerable to unscrupulous bosses and workplace abuses, everyone benefits from a pathway to citizenship. “All workers, whether documented or undocumented, have an interest in being compensated, in not being abused, in being able to blow the whistle,” said America’s Voice legal advisor David Leopold.
The facts don’t lie: immigration is good for families, it’s good for our economy and businesses, and it’s key to our success. “It is important to recognize that undocumented immigrants are paying their fair share toward the public good and hope that one day, they too will benefit from their contributions, just like millions of other Americans who file their taxes and fulfill their civic duty,” Immigration Impact concluded.
