Do illegal immigrants pay taxes? I know you want an answer to this question, then stick to the article.
You can be wondering why illegal immigrants file tax returns without having social security numbers, and how illegal immigrants pay taxes if they can.
Illegal immigrants can pay their taxes in the United States. The Federal Government specifies that paying taxes and filing the tax return is necessary for all people working and having an income within the United States of America, regardless of the person’s immigration status.
We outline the answers to your questions regarding filing taxes for illegal immigrants and how they do it without a Social Security Number.
READ MORE: DO UNDOCUMENTED IMMIGRANTS PAY STATE AND FEDERAL INCOME TAXES?
Do Illegal Immigrants Pay Taxes?
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Yes! Immigrants pay sales income and property taxes. In the year 2021, these households contributed $30.8 billion in total taxes which include $18.6 billion in federal income taxes and $12.2 billion in state and local taxes.
Evidence suggests that at least 50% of illegal immigrant households file income tax returns using Individual Tax Identification Numbers that the IRS issues to encourage tax compliance among non-citizens.
However, even though they pay into Social Security, ITIN holders are not qualified to receive benefits unless they become citizens or lawful permanent residents.
Also, most illegal immigrants’ legal status increases the share of their paychecks that goes to taxes from 8% to 8.6%, according to the Institute on Taxation and Economic Policy.
Why Would an Illegal Immigrant Pay Taxes?
Though many illegal immigrants are paid “under the table” for their work and do not pay taxes on their income, many others do not pay taxes on their income, others do pay in the hope that it will someday help them become citizens.
Moreover, the evidence for this motivation is anecdotal, but various attempts at comprehensive immigration reform legislation for the previous decade.
The probable history of paying taxes is seen as one way to show good faith should such a bill ever pass.
Can Non-Citizens Get Social Security Numbers?
Only certain non-citizens are eligible to receive a Social Security number. If an immigrant is authorized to work temporarily.
Whether through a work visa like an H1-B or a temporary work-authorized status such as Deferred Action for Childhood Arrivals (DACA) or Temporary Protected Status.
A social security number is issued and remains valid for the length of the work authorization period. Green holders, refugees, asylees and certain other non-citizens who are allowed that live and work in the United States indefinitely are also eligible for the Social Security number with no restrictions.
Illegal immigrants add not eligible to obtain a Social Security number.
How Can Illegal Immigrants Be Hired Without a Social Security Number?
Since the Immigration Reform and Control Act of 1986, all employers are required to verify the work eligibility of all newly hired by completing Form I-9, which mandates the employee provide a Social Security number and show documents to their employer to prove work authorization and Identity.
U.S. citizens frequently show their driver’s license and Social Security card, but because several documents can be used to complete the form, the worker does not necessarily need to show their actual Social Security Card.
Illegal workers who are hired without valid work authorization may provide their employer with a fake Social Security number, or even a previously valid number issued when they may have work authorization that has since lapsed.
Furthermore, most employers do not and except for certain employers, are not required to verify this information with the government entity at the time of hire.
Additionally, employers can know not, by law, ask to see any specific or additional documents other than what the worker provides.
So, the Social Security number provided by the illegal immigrant on their Form I-9 would be used by the employer to withhold payroll taxes and would be included on their W-2 form.
What Is an Individual Taxpayer Identification Number (ITIN)?
In the year 1996, the Internal Revenue Service created the ITIN to provide a way for non-citizens that earn income in the United States, including legally-present noncitizens who do not have Social Security Numbers, to pay taxes on money earned in the United States.
Moreover, they allow spouses of work-authorized visa holders to pay taxes on self-employment income, among other uses.
Most experts believe that the vast majority of tax returns filed by the ITINs today are filed by illegal immigrants rather than the intended recipient groups.
There are also a few categories of non-citizens who do not have a Social Security number and are not authorized to work but who are still earning income and legally residing in the United States.
READ MORE: How do Undocumented Immigrants Pay Federal Taxes? An Explainer
How Much Do Illegal Workers Pay in Taxes?
The IRS estimates that illegal immigrants pay close to $9 billion in withheld payroll taxes annually.
Moreover, illegal immigrants as help make the Social Security system more solvent, as they pay into the system but are ineligible to collect benefits upon retirement.
In the year 2010, $12 billion more was collected from the Social Security payroll taxes of illegal workers than was paid out in benefits.
READ MORE: How To Report An Illegal Immigrant Anonymously
Conclusion
Illegal immigrants indeed pay taxes as they have contributed widely to the state and local taxes. Their significant contribution, particularly given that these immigrants are in the country illegally and typically work low-paying jobs.
