Estimated Annual Tax Contributions of DACA Recipients

Households that include a DACA recipient pay an estimated $9.5 billion in taxes each year: roughly $6.2 billion to the federal government and $3.3 billion to state and local governments, according to analysis by the Center for American Progress and the American Immigration Council.¹ Those totals cover income taxes, payroll taxes, sales and excise taxes, and property taxes paid by roughly half a million people who arrived in the United States as children and hold work authorization through the program. The money flows into public budgets even though federal law bars recipients from most of the benefits it funds.

Who Is Paying

The Deferred Action for Childhood Arrivals program gives eligible people a renewable two-year period of protection from deportation along with work authorization.² As of mid-2025, about 515,000 people hold active status, down from roughly 590,000 in 2021 because court orders block new applications while allowing renewals to continue.³

Approved recipients can apply for a Social Security number marked “valid for work only with DHS authorization.”⁴ That number lets them work legally, have taxes withheld, and file annual returns like any other authorized worker. Because most recipients have lived in the country for years, they meet the IRS substantial presence test and are treated as resident aliens for federal income tax purposes, so their worldwide income is subject to U.S. tax.⁵

The Federal Share: About $6.2 Billion

Federal collections from DACA households run about $6.2 billion a year.¹ The figure includes personal income taxes and the employee share of payroll taxes withheld from paychecks. Employers withhold using standard W-4 information, and the IRS tracks the payments by Social Security number the same way it tracks any other worker’s. The money supports the ordinary work of the federal government: defense, courts, transportation, public health, and administration.

The State and Local Share: About $3.3 Billion

State and local governments collect an estimated $3.3 billion a year from DACA households through three main channels.¹

Sales and excise taxes on groceries, clothing, fuel, and other consumer goods, which apply regardless of immigration status.
Property taxes, paid directly by homeowners and indirectly by renters through their rent. Property taxes are the primary funding source for public schools in most of the country.
State income taxes, withheld from wages in states that levy one.

Social Security and Medicare: Paying In, Locked Out

Federal law requires every worker and employer to pay into Social Security and Medicare. The employee’s share is 6.2% of wages for Social Security and 1.45% for Medicare, with the employer matching both.⁶ DACA recipients pay these taxes on every dollar of wages. Earlier American Immigration Council estimates put the contributions at roughly $2 billion to Social Security and nearly $470 million to Medicare each year, based on 2015 data; the current totals are likely higher given wage growth since.

Recipients pay the same rates as everyone else, but federal statute makes people who are not “qualified aliens” ineligible for federal public benefits.⁷ DACA does not confer qualified-alien status, so recipients cannot draw Social Security retirement checks or enroll in Medicare based on their current classification. No federal mechanism refunds payroll taxes to a worker who is ineligible for the corresponding benefits.⁸

There is a narrow path to recovering value from those contributions. Under the Social Security Protection Act of 2004, a noncitizen who was authorized to work at any point can count all prior covered earnings toward benefit eligibility if they later gain lawful permanent residence or citizenship. Until then, the contributions sit in the trust funds as a net surplus that helps pay current retirees.

Which Tax Credits DACA Filers Can Claim

A work-authorized Social Security number opens the door to certain credits, but with limits other workers don’t face.

Earned Income Tax Credit

The EITC requires a valid Social Security number and status as a U.S. citizen or resident alien for the entire tax year.⁹ A DACA recipient with a work-authorized SSN who meets the substantial presence test is treated as a resident alien and can be eligible. The IRS applies the substantial presence test by counting all days in the current year, one-third of days in the prior year, and one-sixth of days from two years back, with the total needing to reach at least 183 days.

Child Tax Credit

Under the rules that applied through tax year 2025, claiming the Child Tax Credit for a child required a work-authorized Social Security number for that child. Starting in tax year 2026, absent new legislation, filers can claim the credit using either a work-authorized SSN or an Individual Taxpayer Identification Number for the child.¹⁰ The change broadens access for mixed-status households.

Self-Employment Tax for Freelancers and Gig Workers

Recipients who freelance, drive for rideshare companies, or run small businesses owe self-employment tax, which covers both halves of Social Security and Medicare. The combined rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare.¹¹ That is roughly double what a W-2 employee pays out of pocket, since there is no employer share.

Anyone with net self-employment earnings of $400 or more in a year must file a return and pay self-employment tax.¹¹ With no employer withholding, self-employed recipients need to make quarterly estimated payments using Form 1040-ES. Missing those deadlines triggers penalties even if the annual return is paid in full.

Where the $9.5 Billion Figure Comes From

The IRS does not publish tax collection data broken down by immigration status. The federal and state totals come from a Center for American Progress analysis built on Census Bureau American Community Survey microdata accessed through IPUMS.¹² Researchers identified likely DACA-eligible individuals in the survey data by age, country of birth, and arrival date, calculated aggregate income by employment status and education, and applied effective federal and state tax rates drawn from Congressional Budget Office data and standard tax brackets. The approach accounts for standard deductions, common credits, and varying compliance rates.

The most widely cited version used 2018–2019 survey data and a count of about 590,000 active recipients as of June 2021. With the population now closer to 515,000, current real-world totals are likely modestly lower, though wage growth since could offset some of the decline. No updated analysis has been released using more recent data.

What the Ongoing Litigation Means for These Numbers

In January 2025, the U.S. Court of Appeals for the Fifth Circuit upheld a lower court ruling finding the DACA final rule unlawful.³ USCIS continues to process renewals, and current grants of DACA and related work permits remain valid until they expire. USCIS is not processing new initial applications, so the pool of active recipients can only shrink as people age out, leave, or fail to renew.

For anyone who still holds valid DACA status and a work-authorized Social Security number, filing obligations, payroll withholding, and credit eligibility all continue unchanged. But the shrinking recipient population means the aggregate contribution totals will gradually fall unless the legal or legislative situation changes. If DACA status lapses, work authorization ends and the SSN can no longer be used for employment, though the obligation to report income to the IRS continues regardless of immigration status.⁵

1
American Immigration Council. Deferred Action for Childhood Arrivals (DACA): An Overview
2
U.S. Citizenship and Immigration Services. Consideration of Deferred Action for Childhood Arrivals (DACA)
3
U.S. Citizenship and Immigration Services. I-821D, Consideration of Deferred Action for Childhood Arrivals
4
Social Security Administration. Types of Social Security Cards
5
Internal Revenue Service. Tax Information and Responsibilities for New Immigrants to the United States
6
Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax
7
Office of the Law Revision Counsel. 8 USC 1611 – Aliens Who Are Not Qualified Aliens Ineligible for Federal Public Benefits
8
Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes
9
Internal Revenue Service. Who Qualifies for the Earned Income Tax Credit (EITC)
10
Congressional Research Service. Noncitizen Eligibility for the Child Tax Credit: In Brief
11
Internal Revenue Service. Self-Employed Individuals Tax Center
12
American Immigration Council. Methodology