Undocumented immigrants in the United States pay federal taxes through the same mechanisms as anyone else: employer payroll withholding, quarterly estimated payments for self-employment income, and an annual return filed with the IRS. The key difference is the taxpayer identification number. Because a Social Security Number isn’t available without work authorization, the IRS issues a nine-digit Individual Taxpayer Identification Number (ITIN) that lets a person file a return, report income, and pay what they owe. State and local taxes get paid the same way they do for everyone else, through sales tax at the register and property tax folded into rent or mortgage payments.
The tax code doesn’t ask about immigration status. It asks whether you earned income and whether you were present in the country long enough to be taxed as a resident. If you meet the substantial presence test, you owe federal tax on your worldwide income regardless of status.1Internal Revenue Service. Tax Information and Responsibilities for New Immigrants to the United States
The ITIN: What It Is and What It Doesn’t Do
An ITIN is a tax processing number. It lets you file a federal return when you can’t get a Social Security Number. It does not grant work authorization, does not change immigration status, and does not create eligibility for Social Security benefits.2Internal Revenue Service. Instructions for Form W-7 – Application for IRS Individual Taxpayer Identification Number Roughly two million primary taxpayers use one each year.
Spouses and dependents can also get ITINs when they’re claimed on a return for a specific tax benefit, such as filing jointly or claiming the Credit for Other Dependents.
Applying for an ITIN
You apply by completing Form W-7 and submitting it with your federal tax return and identity documents. A valid passport satisfies both the identity and foreign-status requirements on its own. Without one, you’ll need at least two documents from the IRS’s approved list, which includes a national ID card, civil birth certificate, foreign driver’s license, or foreign voter registration card.3Internal Revenue Service. Revised Application Standards for ITINs Every document must be unexpired and must show your name and a photo.4Internal Revenue Service. ITIN Supporting Documents
First-time applicants mail Form W-7, the completed Form 1040, and originals or agency-certified copies of the identity documents to the IRS ITIN Operation in Austin, Texas. Notarized photocopies aren’t accepted. Processing runs about seven weeks outside of tax season and nine to eleven weeks for applications filed between January 15 and April 30.2Internal Revenue Service. Instructions for Form W-7 – Application for IRS Individual Taxpayer Identification Number Once assigned, the ITIN arrives by mail and future returns can be filed electronically.
Keeping Your Documents in Hand
Mailing a passport to Texas and waiting weeks for its return worries most applicants. Two options avoid that.
A Certifying Acceptance Agent is authorized by the IRS to verify your documents in person, create certified copies, and submit the ITIN application for you. Your passport stays with you the same day. The IRS maintains a searchable directory of agents.5Internal Revenue Service. ITIN Acceptance Agents Fees typically run $100 to $500.
You can also apply in person at an IRS Taxpayer Assistance Center that offers ITIN services. Staff review Form W-7, authenticate most supporting documents on the spot, and hand them back before you leave.6Internal Revenue Service. How to Apply for an ITIN Not every center handles ITINs, so call ahead.
Expiration and Renewal
An ITIN not used on a federal return for three consecutive years expires automatically on December 31 of that third year.7Internal Revenue Service. How to Renew an ITIN An expired ITIN doesn’t stop you from filing, but it delays any refund until you renew. Renewal uses the same Form W-7 with the renewal box checked, and no tax return needs to be attached.
Payroll Withholding for W-2 Workers
Most workers pay through paycheck withholding. Employers are legally required to withhold federal income tax, Social Security tax (6.2%), and Medicare tax (1.45%) from wages, and to match the Social Security and Medicare portions themselves.8Internal Revenue Service. Tax Withholding That happens regardless of whether the number on file matches Social Security Administration records. When it doesn’t match, the taxes still flow to the Treasury and the Social Security trust funds; the Social Security Administration parks the mismatched earnings in the Earnings Suspense File.
At the end of the year, the W-2 you receive is what you use to file your Form 1040 with your ITIN.
Self-Employment Tax and Quarterly Payments
Independent contractors, day laborers paid in cash, and anyone else without an employer withholding tax owe self-employment tax at 15.3% on net earnings, covering both halves of Social Security (12.4%) and Medicare (2.9%).9Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) Regular income tax sits on top of that.
If you expect to owe $1,000 or more when you file, you have to send estimated quarterly payments using Form 1040-ES.10Internal Revenue Service. Estimated Taxes Miss one, or underestimate income, and you’ll owe a penalty even if a refund eventually shows up on your annual return. Keeping records of every payment received and every business expense is how you calculate accurately each quarter.
Which Tax Credits ITIN Filers Can Claim
Filing with an ITIN closes off some of the most valuable credits.
The Earned Income Tax Credit isn’t available. You, your spouse if filing jointly, and any qualifying child all need valid Social Security Numbers; an ITIN doesn’t count. Claiming it anyway can trigger penalties and a two-year ban.11Internal Revenue Service. Who Qualifies for the Earned Income Tax Credit
The Child Tax Credit requires the child to have a Social Security Number valid for employment, issued before the return’s due date. An ITIN parent whose child has an SSN can claim the credit for that child. A child who only has an ITIN doesn’t qualify.12Internal Revenue Service. Child Tax Credit
What you can claim is the Credit for Other Dependents, worth up to $500 per qualifying dependent, who can hold either an SSN or an ITIN and must be a U.S. citizen, national, or resident alien. It phases out starting at $200,000 of income, or $400,000 for joint filers.13Internal Revenue Service. Understanding the Credit for Other Dependents Education credits, including the American Opportunity Tax Credit, are also available to ITIN filers as long as the student has a valid SSN, ITIN, or adoption taxpayer identification number.14Internal Revenue Service. Education Credits – AOTC and LLC
Paying Social Security Without Collecting
Payroll deductions for Social Security and Medicare come out of every paycheck, but the benefits generally don’t come back. For anyone assigned a Social Security Number on or after January 1, 2004, covered earnings don’t count toward benefit eligibility unless the worker had work authorization at some point.15Congress.gov. Social Security Benefits for Noncitizens And federal law bars monthly Social Security payments to anyone in the United States who isn’t lawfully present.16Social Security Administration. Can Noncitizens Receive Social Security Benefits or Supplemental Security Income Medicare works the same way: payroll taxes fund it, but enrollment requires lawful presence.
State, Local, and Sales Taxes
Sales and excise taxes are collected at the register on almost every purchase. Property taxes hit homeowners directly and renters indirectly through rent that factors the tax in. In states with an income tax, ITIN holders can file state returns the same way they file federal ones. None of these depend on immigration status.
Is Filing With an ITIN Safe from Immigration Enforcement?
Federal law treats tax returns and return information as confidential. Under 26 U.S.C. ยง 6103, IRS employees and anyone else who handles return information can’t disclose it except through specific channels the tax code authorizes.17Office of the Law Revision Counsel. 26 USC 6103 – Confidentiality and Disclosure of Returns and Return Information The exceptions are narrow: a federal judge can order disclosure to law enforcement in a non-tax criminal investigation, and grand juries can access certain data, both with judicial oversight.18Internal Revenue Service. Disclosure Laws
In 2025, the Department of Homeland Security and the Treasury Department signed a memorandum of understanding allowing the IRS to share taxpayer information with Immigration and Customs Enforcement, framing each targeted person as under criminal investigation for failing to depart after a removal order. Federal courts have blocked pieces of the arrangement. A judge in the District of Columbia enjoined the IRS from sharing taxpayer addresses with ICE, and that injunction remains in effect on appeal. A Massachusetts ruling went further, barring ICE from inspecting, copying, or acting on any return information obtained under the agreement. Litigation is ongoing.
Tax attorneys and immigrant advocacy organizations broadly advise continuing to file. The costs of not filing (back taxes, penalties, and gaps in your record) are certain; the data-sharing risk remains legally contested and constrained by court orders.
Why Filing Helps Later Immigration Cases
A record of filed returns can be some of the strongest evidence in an immigration case. When USCIS evaluates good moral character for naturalization or immigration relief, tax compliance counts as a positive factor in a holistic review, and unfiled returns or back taxes count against the applicant.19U.S. Citizenship and Immigration Services. Restoring a Rigorous, Holistic, and Comprehensive Good Moral Character Evaluation Standard for Aliens Applying for Naturalization
Tax returns also work as documentation of physical presence in the United States on specific dates. Federal regulations list income tax records as acceptable evidence for adjustment-of-status applications requiring proof of presence at a particular time.20eCFR. 8 CFR 1245.22 – Evidence to Demonstrate an Aliens Physical Presence in the United States on a Specific Date A continuous filing history builds a paper trail that no single document matches.
Keep every return, every W-2 or 1099, and every ITIN notice. The IRS suggests keeping tax records for at least three years, but for immigration purposes, holding onto them indefinitely is the safer choice.