Migrants in the United States do pay taxes, and they pay the same kinds citizens pay: federal income tax, Social Security and Medicare, state and local income tax where it applies, sales and excise taxes on what they buy, and property taxes on what they own or rent. The tax code is not a citizenship test. It looks at where you earn money and where you spend it. One tax policy estimate put undocumented immigrants’ contribution alone at roughly $96.7 billion in federal, state, and local taxes in a single recent year.
How Undocumented Immigrants File Income Tax
Anyone whose gross income crosses the filing threshold owes federal income tax, whatever their immigration status. For tax year 2026, a single filer under 65 must file once gross income reaches $16,100.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 The obligation itself comes from federal statute, which requires a return from every individual whose gross income exceeds the applicable threshold.2Office of the Law Revision Counsel. 26 U.S. Code 6012 – Persons Required to Make Returns of Income
Migrants with work authorization use a Social Security Number and file a Form 1040 like any citizen. For people who are not eligible for an SSN, the IRS issues an Individual Taxpayer Identification Number. An ITIN is a nine-digit processing number available to anyone regardless of immigration status, including undocumented immigrants and certain nonresident aliens.3Internal Revenue Service. Individual Taxpayer Identification Number (ITIN) You apply by submitting Form W-7 with identity documents such as a passport or birth certificate. The ITIN exists so the IRS can collect tax from people the Social Security Administration will not issue a number to.
Once you have either number, you face the same graduated rates as everyone else and the same rules on filing status, dependents, and deductions.
Payroll Taxes Come Out Automatically
Every worker on a formal payroll has Social Security and Medicare taxes withheld before they see the paycheck. Under the Federal Insurance Contributions Act, employers deduct 6.2% of wages for Social Security and 1.45% for Medicare, then match those amounts.4Social Security Administration. What Are FICA and SECA Taxes? The Social Security portion applies to earnings up to $184,500 in 2026.5Social Security Administration. What Is the Current Maximum Amount of Taxable Earnings for Social Security? Medicare has no cap, and single filers pay an additional 0.9% on wages above $200,000.6Internal Revenue Service. Topic No. 560, Additional Medicare Tax
This withholding happens whether the worker is a citizen, a visa holder, or undocumented. FICA deductions are mandatory and automatic for anyone on payroll. An employer who hires a worker has a legal obligation to withhold and remit these taxes regardless of the worker’s immigration status.
Migrants who work as independent contractors or run small businesses owe the combined employer and employee share on their own. The self-employment tax rate is 15.3%, split into 12.4% for Social Security and 2.9% for Medicare.7Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) You can pay self-employment tax with either an SSN or an ITIN. Anyone with net self-employment income of $400 or more must file a return and pay this tax, even if total income falls below the ordinary filing threshold.
Paying In Without Being Able to Draw Out
Undocumented workers who have Social Security tax deducted from their paychecks generally cannot collect retirement or disability benefits from those contributions. When wages get reported under a number that does not match Social Security Administration records, the money goes into what is called the Earnings Suspense File, which has accumulated over $1.5 trillion.8Congress.gov. Social Security Benefits for Noncitizens That money still funds current benefits for retirees. The workers whose paychecks were docked will likely never see a return on those contributions.
Sales, Excise, and Property Taxes
Consumption taxes require no filing and no identification. Every person who buys goods or services in a state with a sales tax pays that tax at the register. Combined state and local sales tax rates run from zero in states like Oregon and Montana to more than 10% in some localities, with a national average around 7.5%.
Excise taxes are baked into the price of specific products. The federal excise tax on gasoline is 18.4 cents per gallon, with state fuel taxes stacked on top.9U.S. Energy Information Administration. Frequently Asked Questions – How Much Tax Do We Pay on a Gallon of Gasoline Similar excises apply to tobacco and alcohol. Immigration status is invisible in these transactions. A gallon of gas costs the same for everyone.
Property tax works the same way. Migrants who own homes pay property tax through annual or semi-annual bills from the local assessor. There is no citizenship requirement for owning property or paying property tax in the United States. Failure to pay leads to liens and eventually foreclosure. Renters contribute less visibly: landlords build property tax into the rent, so tenants cover it as part of the monthly payment that also funds local schools, roads, and fire departments.
State and Local Income Taxes
Most states impose their own income tax on residents. Only nine states have no individual income tax on wages. States tax anyone who lives there or earns income there, and residency for tax purposes is based on physical presence and economic ties, not immigration status. If you live and work in a state with an income tax, you owe that state money.
State income tax withholding operates through the same paycheck mechanism as the federal version. Self-employed workers owe estimated quarterly payments in states that tax income. Migrants working in income-tax states contribute through the same infrastructure that captures federal taxes.
Credits ITIN Filers Cannot Claim
ITIN filers carry the same tax obligations as SSN holders without access to all the same benefits. Two of the largest refundable credits are off-limits.
The Earned Income Tax Credit requires a valid Social Security Number for the filer, their spouse if filing jointly, and any qualifying child. ITIN holders cannot claim it under any circumstances.10Internal Revenue Service. Topic No. 601, Earned Income Credit The EITC can be worth thousands of dollars for low-income workers, so this exclusion is a significant gap between ITIN and SSN filers doing identical work at identical wages.
The Child Tax Credit works differently. A parent can file with an ITIN, but each qualifying child must have a Social Security Number valid for employment.11Internal Revenue Service. Child Tax Credit Where the children are U.S.-born citizens with SSNs but the parents file with ITINs, the credit is available. Where the children lack SSNs, it is not.
Confidentiality When You File
A common fear among undocumented immigrants is that filing a return will lead to deportation. Federal law provides meaningful, though not absolute, confidentiality. Under 26 U.S.C. ยง 6103, tax returns and return information are confidential, and IRS employees are generally prohibited from disclosing them to other government agencies.12Office of the Law Revision Counsel. 26 U.S. Code 6103 – Confidentiality and Disclosure of Returns and Return Information
The protection has limits. Section 6103(i) allows disclosure of limited taxpayer information, including name, address, and taxpayer identification number, to federal agencies conducting non-tax criminal investigations, provided they obtain a court order or meet other statutory criteria. The scope of what can be shared with immigration enforcement has been the subject of ongoing litigation, and the legal picture in this area is still shifting. Filing with an ITIN does create a paper trail. Not filing also carries risk: it removes any documented tax compliance history that may matter later in immigration proceedings where good moral character is at issue.
Keeping an ITIN Active
An ITIN can lapse. If you do not use it on a federal tax return for three consecutive years, it expires on December 31 after that third year of non-use.13Internal Revenue Service. How to Renew an ITIN An expired ITIN still works on information returns like a Form 1099, but you cannot use it to file your own return until you renew.
To renew, submit a new Form W-7 with the renewal box checked and current identity documentation. If you are renewing along with a return, you need to submit the W-7 with the return by the filing deadline. Missing that deadline can delay your refund and disqualify you from refundable credits for that tax year.14Internal Revenue Service. Form W-7 Application for IRS Individual Taxpayer Identification Number If you know your ITIN has lapsed, start the process well before April.