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Immigration 101: Do Immigrants Pay Taxes?

by America's Voice on

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First published May 23, 2019; last updated April 19, 2024.

In a word: yes. 

People who demonize immigrants often claim that they are “takers” who “don’t even pay taxes.” Nothing could be further from the truth.

Immigrants, regardless of immigration status, are on the hook for a variety of taxes, including local, state, and federal income taxes. It’s the law — everyone who resides in the US and earns an income must pay taxes on that income. 

Immigrants who do not have a Social Security number use an Individual Taxpayer Identification Number (ITIN) to legally file tax returns and report their income to the IRS. In 2019, over 2 million tax returns were filed by a primary taxpayer with an ITIN. It is also important to note that ITIN holders’ tax information is legally protected and their information cannot be shared with the Department of Homeland Security or Immigration and Customs Enforcement.

@americasvoice It’s a MYTH that immigrants don’t pay taxes. Actually… #taxes #taxday #immigrants ♬ original sound – AmericasVoice

How much do immigrants pay IN TAXES? 

Immigrants pay a LOT of taxes — by some estimates, more than their fair share. According to Immigration Impact, immigrants contribute $383 billion to federal taxes and $196 billion to state and local taxes each year. This money helps to pay for education, Social Security, and Medicaid, among other things.

The American Immigration Council broke down immigrant contributions state-by-state here. In immigrant-rich states like Texas, immigrants make up more than one-fifth of the labor force and pay $15 billion in state and local taxes annually. But even in states where there are fewer immigrants, like Iowa, immigrants are a major presence in major industries like dairy and meatpacking, and contribute $631 million in state and local taxes annually.

IMMIGRANT TAXES CONTRIBUTE TO Medicare and Social Security

Perhaps you’ve heard the concern that Social Security is running out and that future generations will be unable to benefit. Immigrants play a large role in keeping Social Security afloat. The Social Security Administration estimated that undocumented workers pay $13 billion into the system annually and have contributed $100 billion over the last decade.

Similarly, immigrants have been critical to keeping Medicare and Medicaid afloat. As the National Immigration Forum said in 2022. “Between 2000 and 2011, undocumented immigrants generated a $35.1 billion surplus in the Medicare Trust Fund.” 

Specific groups of immigrants each make their own substantial contributions. DACA recipients contribute $2 billion to Social Security and Medicare every year, while TPS holders contribute $700 million annually. Despite their immense financial contributions to Social Security and Medicare, undocumented immigrants are ineligible to apply for benefits under either program, again debunking the claim that they are takers.

Because granting legal status to immigrants tends to boost their career prospects, immigration reform would allow immigrant workers to contribute even more to their communities. For example, the Center for American Progress found that a pathway to citizenship for all undocumented immigrants currently in the US would “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. In other words, a win-win for both immigrant and U.S.-born workers.

Below, you can watch a video from immigration advocate Juan Escalante, who explains why paying his taxes as an American is one of the most American things he does: