Quick Answer
Yes — undocumented immigrants pay federal income taxes, Social Security taxes, and Medicare taxes. The IRS created the ITIN specifically for people without SSNs to file and pay taxes. ITIN filers use the same Form 1040 as any other taxpayer, can claim the standard deduction, and may qualify for the $500 Credit for Other Dependents. The Child Tax Credit requires both the child and the filer to have qualifying SSNs starting in tax year 2025.
How Do Undocumented Immigrants Pay Taxes?
Taxes are paid in 2 main ways. Federal income, Social Security, and Medicare taxes are withheld automatically from every paycheck regardless of immigration status, and a worker then files a Form 1040 using their ITIN. Undocumented immigrants paid $96.7 billion in taxes in 2022, and the IRS has issued roughly 26 million ITINs since the program began:
Through Withholding (Every Paycheck)
When an employer pays wages, federal and state income taxes, Social Security taxes, and Medicare taxes are withheld automatically from each paycheck — regardless of the worker's immigration status. An employee doesn't need an SSN for taxes to be withheld. At year end, the employer issues a W-2, which the worker uses to file a tax return.
By Filing a Tax Return with an ITIN
The IRS created the Individual Taxpayer Identification Number (ITIN) specifically for people who have a U.S. tax obligation but are not eligible for a Social Security Number. Undocumented immigrants file the same Form 1040 as any other taxpayer — they just use their ITIN where an SSN would appear. According to the Institute on Taxation and Economic Policy, undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022. The IRS has issued approximately 26 million ITINs since the program started. See: How to Apply for an ITIN.
What Types of Taxes Do ITIN Filers Pay?
ITIN filers pay the same 5 categories of tax as anyone else: federal income tax (withheld or paid on Form 1040), Social Security and Medicare (FICA) withheld from every paycheck, state income tax in most states, sales tax on every purchase, and property tax directly as homeowners or indirectly through rent:
| Tax Type | How It's Paid |
|---|---|
| Federal income tax | Withheld from paycheck or paid when filing Form 1040 with ITIN |
| Social Security & Medicare (FICA) | Withheld from every paycheck; no immigration check at payroll |
| State income tax | Withheld or paid on state return; most states accept ITIN |
| Sales tax | Paid automatically on every purchase, no ID required |
| Property tax | Directly (homeowners) or indirectly (folded into rent by landlord) |
What Is the Social Security Situation for Undocumented Immigrants?
Social Security and Medicare taxes (FICA) are withheld from paychecks regardless of immigration status, yet undocumented immigrants generally cannot collect retirement or disability benefits — they contribute roughly 7.65% of every paycheck without being able to draw from it. This funds the SSA's multi-billion-dollar "earnings suspense file" of contributions that cannot be matched to a valid SSN.
What Tax Credits Can ITIN Holders Claim?
ITIN filers can take the standard deduction (about $16,100 single for 2026) and the $500 Credit for Other Dependents, but cannot claim the Earned Income Tax Credit, and single ITIN filers cannot claim the Child Tax Credit starting in tax year 2025 — that credit now requires the filer to have a work-authorized SSN. The full breakdown:
Cannot claim:
- Earned Income Tax Credit (EITC): Requires a valid SSN for the filer. ITIN holders are excluded — even if their children have SSNs.
- Child Tax Credit / ACTC (single ITIN filers): Starting with tax year 2025, the filer — not just the qualifying child — must have a work-authorized SSN. A single ITIN filer cannot claim the CTC or ACTC even if their U.S.-born child has an SSN. On a joint return where one spouse has a work-authorized SSN, the credit may be available if the child also has an SSN.
Can claim:
- Standard deduction: All ITIN filers can take the standard deduction (approximately $16,100 single / $32,200 MFJ for 2026 — check IRS.gov for final figures).
- Credit for Other Dependents ($500): Available to ITIN filers for qualifying dependents regardless of the filer's SSN status. No work-authorized SSN required for the filer. See: Child Tax Credit With an ITIN.
- Refund of withheld taxes: If more was withheld than owed, ITIN filers receive a refund by filing. See: Can You Get a Tax Refund With an ITIN?
Why Should Undocumented Immigrants File Taxes Even Without an SSN?
Filing protects 3 things even without an SSN: unclaimed refunds (since taxes were withheld but never returned), eligible credits like the $500 Credit for Other Dependents, and a documented record of tax compliance that can matter in future immigration proceedings. The IRS does not share ITIN return information with immigration enforcement as standard policy — filing is separate from immigration status.
For how to actually file, see: How to File Taxes With an ITIN.
Frequently Asked Questions
Do undocumented immigrants pay taxes?
Yes. Undocumented immigrants pay federal income taxes, payroll taxes (Social Security and Medicare), state income taxes, sales taxes, and property taxes (directly or through rent). They file using an Individual Taxpayer Identification Number (ITIN) issued by the IRS.
Do undocumented immigrants pay Social Security taxes?
Yes. If wages are paid, Social Security and Medicare taxes are withheld from every paycheck regardless of immigration status. However, undocumented immigrants generally cannot collect Social Security benefits later.
Can undocumented immigrants get a tax refund?
Yes — if more was withheld from their paycheck than they owe, they can receive a refund by filing with an ITIN. However, they cannot claim the Earned Income Tax Credit (EITC), which requires an SSN.
What tax credits can ITIN holders claim?
ITIN holders cannot claim the Earned Income Tax Credit (EITC). Starting tax year 2025, they cannot claim the Child Tax Credit as a single filer — the filer must also have a work-authorized SSN, not just the qualifying child. They can claim the $500 Credit for Other Dependents and the standard deduction.