Yes, asylum seekers do pay taxes. If you earn income in the United States while your Form I-589 is pending, you owe federal income tax on it, and the IRS does not carve out an exception based on immigration status.1Office of the Law Revision Counsel. 26 U.S.C. 1 – Tax Imposed How you file depends on whether you already have a Social Security number or need to use an Individual Taxpayer Identification Number instead.
Which Identification Number You File With
You can apply for an Employment Authorization Document 150 days after filing your asylum application and become eligible to receive one after 180 days have passed.2U.S. Citizenship and Immigration Services. Applicant-Caused Delays in Adjudications of Asylum Applications and Impact on Employment Authorization Once the EAD is in hand, you can apply to the Social Security Administration for a Social Security number, since noncitizens authorized to work are generally eligible.3Social Security Administration. Social Security Numbers for Noncitizens
If you don’t yet have work authorization, or otherwise can’t get an SSN, you file with an ITIN. The ITIN is a nine-digit number issued by the IRS solely for tax processing. It doesn’t grant work authorization and doesn’t change your immigration status.4Internal Revenue Service. About Form W-7, Application for IRS Individual Taxpayer Identification Number
What Income Is Taxed
The scope of your tax obligation turns on whether the IRS treats you as a resident alien or a nonresident alien. Resident aliens report income from all sources worldwide and file Form 1040, the same return U.S. citizens use. Nonresident aliens report only U.S.-source income and file Form 1040-NR.5Internal Revenue Service. Alien Taxation – Certain Essential Concepts6Internal Revenue Service. Taxation of Nonresident Aliens
The IRS makes that call using the Substantial Presence Test. You meet it if you were in the United States at least 31 days during the current calendar year and your weighted days over the current and two prior years total 183 or more. Current-year days count in full, first-preceding-year days count as one-third, and second-preceding-year days count as one-sixth.7Office of the Law Revision Counsel. 26 U.S.C. 7701 – Definitions Most asylum seekers who have been in the country for a year or more clear this threshold easily and file as resident aliens.
On top of income tax, wages are subject to Social Security and Medicare taxes under FICA. Employers withhold 6.2 percent for Social Security and 1.45 percent for Medicare, for a combined employee share of 7.65 percent.8Social Security Administration. What Is FICA? If you’re self-employed, you pay both halves yourself, which comes to 15.3 percent.9Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Credits You Can And Can’t Claim With An ITIN
Two of the largest federal tax credits are closed to ITIN filers. The Child Tax Credit requires each qualifying child to have a Social Security number valid for employment and issued before the return’s due date.10Internal Revenue Service. Child Tax Credit The Earned Income Tax Credit requires valid SSNs for you, your spouse (if filing jointly), and any qualifying child.11Internal Revenue Service. Who Qualifies for the Earned Income Tax Credit (EITC)
The smaller Credit for Other Dependents, worth up to $500 per dependent, is available for dependents with either an SSN or an ITIN.12Internal Revenue Service. Parents – Check Eligibility for the Credit for Other Dependents Once you and your children have Social Security numbers, the larger credits open up and can reduce your tax bill by thousands of dollars.
How To Get An ITIN
If you need an ITIN, apply on IRS Form W-7. A valid passport is the simplest supporting document because the IRS accepts it as standalone proof of both identity and foreign status. Without a passport, you’ll need at least two documents from the IRS’s approved list, such as a birth certificate, foreign voter registration card, or national identification card.13Internal Revenue Service. Instructions for Form W-7
Form W-7 must be submitted together with a federal tax return; the return is the reason the IRS issues the number. Mail the package to:
Internal Revenue Service
ITIN Operation
P.O. Box 149342
Austin, TX 78714-934213Internal Revenue Service. Instructions for Form W-7
Processing runs about seven weeks in the off-season and nine to eleven weeks during tax season (January 15 through April 30) or when the application comes from overseas.14Internal Revenue Service. Individual Taxpayer Identification Number (ITIN) You’ll submit originals or certified copies from the issuing agency. The IRS returns originals after processing, but plan to be without them for the full processing window.
What Happens If You Don’t File
Skipping the return is not free. Two penalties stack. The failure-to-file penalty is 5 percent of unpaid tax for each month or part of a month the return is late, capped at 25 percent. The failure-to-pay penalty adds another 0.5 percent per month on any unpaid balance, also capped at 25 percent.15Internal Revenue Service. Failure to File Penalty16Internal Revenue Service. IRS Notices and Bills, Penalties and Interest Charges
If your return is more than 60 days late, the minimum failure-to-file penalty for returns due after December 31, 2025, is $525 or 100 percent of the unpaid tax, whichever is less.15Internal Revenue Service. Failure to File Penalty Even if you can’t pay the full balance, filing on time eliminates the larger penalty and limits your exposure to the smaller one.
Why Filing Helps Your Immigration Case
Filing does more than keep the IRS off your back. When asylum seekers later apply to adjust status to lawful permanent residence, USCIS looks at good moral character, and tax compliance is one of the factors weighed. USCIS may ask for IRS transcripts or copies of filed returns as supporting evidence, and a history of unfiled returns can raise questions that complicate an otherwise strong application. Every year you file adds another piece of documentation showing you followed U.S. law while your case was pending.
Free Help Through VITA
The IRS runs Volunteer Income Tax Assistance sites that specifically offer ITIN services. Staff can help you complete Form W-7, authenticate most supporting documents on the spot so you don’t have to mail originals, and prepare your return at no charge.17Internal Revenue Service. Volunteer Income Tax Assistance (VITA) Sites With ITIN Services Having your documents reviewed in person also cuts down on the errors that lead to rejected applications and longer waits.