Study Finds Undocumented Immigrants Pay More Than $11 Billion in Taxes a Year

Opponents of illegal immigration say that undocumented immigrants who claim to “take away jobs from Americans” collect salaries without paying a dime in taxes. But a new study may help do away with that notion.

The Latin Post reported on a study from the Institute on Taxation and Economic Policy which found that illegal immigrants employed in the U.S. pay out approximately $11.64 billion a year in taxes; that works out to an average of 8% of their incomes between state and local taxes. The study further shows that undocumented immigrants pay more taxes than those in the top 1% income bracket, who pay an average of 5.4% of their incomes.

Of that amount, $6.9 billion comes from sales and excise taxes, $3.6 billion comes from property taxes and $1.1 billion comes from personal income taxes. The report also found that, if all the undocumented immigrants living in the U.S. were granted Legal Permanent Resident status and given the chance to be legally employed, they would have to pay an additional $2.1 billion collectively. In addition, their tax rate will go up from its current rate of 8% up to 8.6%.

“The best evidence suggests that at least 50 percent of undocumented immigrant households currently file income tax returns using Individual Tax Identification Numbers (ITINs), and many who do not file income tax returns still have taxes deducted from their paychecks,” the report stated.

The New York City immigration attorneys at Bretz & Coven LLP frequently counsel employers, business owners and human resource administrators on issues of progressive immigration compliance, especially relating to Form I-9. It is the firm’s mission to guide the business community with the ever-changing immigration law in the United States. Call 1 (212) 267-2555 or contact us through our web form for help with I-9 issues or immigrant-employee verification.