As Tax Day looms, it’s essential to recognize the tax contributions made by all members of our society, including undocumented immigrants. Contrary to popular belief, many undocumented immigrants pay taxes and contribute to the U.S. tax base, thereby supporting public services and programs that benefit all Americans.
I. The Tax Contributions of Immigrants
Undocumented immigrants contribute significantly to the U.S. tax system by paying various types of taxes, including sales, income, and property taxes.
• In 2021, undocumented immigrants contributed $30.8 billion in taxes, with $18.6 billion in federal income taxes and $12.2 billion in state and local taxes, based on data from the American Community Survey.
II. Individual Tax Identification Numbers (ITINs)
Many undocumented immigrants file income tax returns using ITINs, which are tax processing numbers issued by the Internal Revenue Service (IRS).
• According to the Institute on Taxation and Economic Policy, at least 50% of undocumented immigrant households use ITINs to file their tax returns.
• Other individuals, such as legal permanent residents, foreign nationals working in the U.S., and immigrant spouses of U.S. citizens, may also obtain ITINs.
• In 2015, 4.4 million ITIN filers contributed over $5.5 billion in payroll and Medicare taxes and $23.6 billion in total taxes, as reported by the IRS.
III. Limited Tax Benefits for ITIN Holders
Despite their tax contributions, ITIN holders are not eligible for all the tax benefits and public programs available to U.S. citizens and other taxpayers.
• ITIN holders cannot receive Social Security benefits or the Earned Income Tax Credit (EITC).
• ITIN holders contribute to programs like Medicare and Medicaid, which many Americans rely on daily.
• If an ITIN holder becomes eligible for Social Security in the future (e.g., by obtaining lawful permanent resident status), their previously reported earnings may count toward their eligibility. However, if they never become eligible, they cannot collect on their contributions.
IV. Even Undocumented Immigrants Who Do Not File Income Tax Returns Often have Taxes Deducted from Their Paychecks, Contributing to the US Tax base.
It’s crucial to acknowledge that undocumented immigrants contribute to the public good by paying taxes, just like millions of other Americans who fulfill their civic duty. By recognizing their contributions, we can work towards a more inclusive society that values the efforts of all its members, regardless of their immigration status.
If you or your family members have any questions about how immigration and nationality laws in the United States may affect you, or if you want to access additional information about immigration and nationality laws in the United States or Canada, please don’t hesitate to contact the immigration and nationality lawyers at NPZ Law Group. You can reach us by sending an email to firstname.lastname@example.org or by calling us at 201-670-0006 extension 104. We also invite you to visit our website at www.visaserve.com for more information.