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FACT BRIEF

Do undocumented immigrants pay taxes?

By Todd Butterworth on 04/07/2023

YES

Undocumented immigrants pay sales, income and property taxes. In 2021, these 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.

Evidence suggests that at least 50% of undocumented immigrant households file income tax returns using Individual Tax Identification Numbers, which the IRS issues to encourage tax compliance among non-citizens. Even though they pay into Social Security, ITIN holders are not eligible to receive benefits unless they become citizens or lawful permanent residents.

Many undocumented immigrants who do not file income tax returns still have taxes deducted from their paychecks.

Granting undocumented immigrants legal status would increase the share of their paychecks that goes to taxes from 8% to 8.6%, according to the Institute on Taxation and Economic Policy.

In 2017, it was estimated Nevada’s undocumented immigrants paid $86 million in state and local taxes. 

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