Race Day Live Many immigrants living in the U.S. without legal status contribute billions of dollars in tax revenue each year. They pay taxes through an Individual Taxpayer Identification Number (ITIN) issued by the IRS.
However, they do not qualify for federal benefits like Social Security and Medicare, even though their tax dollars support these programs.
This has raised concerns about former President Donald Trump’s plan to deport millions of undocumented immigrants.
If implemented, the plan could cause a significant drop in tax revenue, affecting the financial health of programs that millions of Americans depend on.
How Do Immigrants Pay Taxes Without Legal Status?
Since undocumented immigrants cannot get a Social Security number, the IRS provides ITINs, allowing them to file tax returns.
While ITINs help immigrants comply with tax laws, they do not grant legal work status or eligibility for government benefits.
Many immigrants still pay taxes to show good moral character, which could help them in future immigration cases.
Cecilia Menjívar, a sociology professor at the University of California, Los Angeles, explained that immigrants living in the U.S. illegally pay taxes because failing to do so could increase their chances of deportation.
For many, following IRS rules is a way to protect themselves and their families.
The Economic Impact of Deportation
The Social Security Administration has estimated that if Trump’s deportation plan moves forward, the U.S. government could lose $20 billion in tax revenue each year.
With a rising number of retirees and a declining birth rate, the country relies heavily on tax contributions from both documented and undocumented workers to fund programs like Social Security and Medicare.
In 2022, the Institute on Taxation and Economic Policy reported that undocumented immigrants paid about $96.7 billion in U.S. taxes.
More than half of this went to the federal government, with the rest going to state and local governments.
Undocumented Immigrants Fund Programs They Cannot Use
A significant portion of the tax revenue generated by undocumented immigrants helps fund programs such as the
Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), unemployment benefits, housing assistance, and tax credits. However, immigrants without legal status are ineligible for these benefits.
Some immigrants who later gain legal status can use past ITIN tax records to qualify for Social Security benefits. However, many remain unable to access the services they have helped fund for years.
The Role of Immigrants in the U.S. Workforce
As of July 2023, the Center for Migration Studies estimated that over 11 million immigrants were living in the U.S. illegally.
Of these, more than 8 million were active workers, contributing to economic growth and tax revenue.
With fewer U.S.-born workers entering the job market, immigrants play a crucial role in maintaining the workforce.
Their contributions keep government funds stable and ensure the continued operation of essential programs.
ITIN System and Tax Compliance
The ITIN system, established in the 1990s, was designed to help foreign nationals comply with U.S. tax laws.
While many ITIN holders are undocumented immigrants, others include student visa holders, spouses and children of work visa holders, and survivors of domestic violence.
Unlike a Social Security number, an ITIN does not indicate legal immigration status.
The IRS also does not share ITIN information with other government agencies, which helps protect taxpayers from immigration enforcement actions.
Some states allow ITIN holders to obtain driver’s licenses or open bank accounts. If an undocumented immigrant becomes a legal resident, their previous ITIN tax payments may count toward their Social Security benefits.
Read More:
- Social Security Wage Cap and Benefits Adjustments for Wisconsin in 2025!
- Viral PSA Warns Americans to Print Social Security Statements Immediately!
Do Immigrants Receive More Than They Pay?
Despite common misconceptions, undocumented immigrants contribute far more in taxes than they receive in government benefits.
A 1996 law prevents newly documented immigrants from accessing federal assistance for five years after receiving legal status.
This means that even after becoming citizens, many immigrants still do not qualify for benefits immediately.
Menjívar warns that removing millions of immigrant workers would have major economic consequences.
“If you remove several million people from contributing taxes and supporting local economies through sales and property taxes, it will impact businesses, jobs, and government programs,” she said.
Conclusion
Undocumented immigrants in the U.S. contribute billions in taxes every year, helping to support programs they cannot access.
With an aging population and a shrinking workforce, their contributions are more important than ever.
As debates over immigration policy continue, experts warn that mass deportations could have serious financial consequences for the country as a whole.
Disclaimer- Our team has thoroughly fact-checked this article to ensure its accuracy and maintain its credibility. We are committed to providing honest and reliable content for our readers.