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Yes, Illegal Immigrants Do Pay Taxes- This Is How

Submitted by on January 3, 2014 – 1:19 pm7 Comments

The case of Sergio Garcia has reignited debate- and misconceptions- over undocumented immigrants in the US. One of the most common criticisms is that “illegals don’t pay taxes,” and therefore should not have any access to any services or benefits provided by the government. Among other failings, this argument ignores the fact that millions of undocumented workers do in fact pay taxes, even without a Social Security Number, while not receiving any of the benefits that this usually brings.

Garcia’s father is now a legal US resident, and Garcia himself has been on the waiting list for legal status and a green card for years. He has worked his way through college and law school, and passed the California bar exam on his first try. But the state’s Supreme Court withheld his licensing, as it considered whether the law prohibited an undocumented immigrant from practicing law.

After new legislation was overwhelmingly approved by the state legislature and signed by the governor, the Obama administration withdrew its objections and Garcia was approved to practice law, though his employment opportunities are still extremely limited by his immigration status.

Among critics of the decision, a frequent refrain was that undocumented immigrants don’t pay taxes, and therefore should get any benefits- like being licensed to practice law.

But many immigrants pay the federal payroll taxes that are automatically withheld from all paychecks. Contrary to popular opinion, many undocumented workers are on formal payrolls- in 2005, an IRS official estimated that it was 75% of that population. These workers use fake SSNs, which are easily obtainable on the street. But fake SSNs will not allow the users to actually collect benefits, meaning the workers are paying into Social Security and Medicare, but not taking from it. Others pay taxes using Individual Tax Payer Identification Numbers (ITINs), which were created by the IRS in 1996 for workers required to file in the US, but unable to get SSNs.

Many undocumented immigrants do not file federal tax returns, for fear of being discovered (even though the IRS never discloses immigration statuses to enforcement agencies). But this most likely hurts the immigrants themselves: their low incomes mean they are probably entitled to a large refund of the automatically withheld payroll taxes, but they will never actually seek this payment, meaning it remains with the government.

Admittedly, some undocumented workers are paid in cash, and should (but probably don’t) pay taxes on this income. However, as noted, this is a much smaller percentage of undocumented workers than is normally thought; and this non-reporting of cash income is true of many legal US residents and workers, including those who work for tips.

Also, undocumented workers pay sales tax on all purchases, and local property taxes (indirectly in the case of renting). These taxes are often overlooked in general by those who argue about some Americans “not paying any taxes.”

[via Roy Germano]

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  • James Moore says:

    What makes the author think they automatically are having taxes deducted from their paychecks? Does Ben Glaser not understand that depending on how many dependents are claimed, it is possible to have -0- taxes automatically deducted?
    My family of 5 has NO deductions from my paycheck, because my salary is at the level where no deductions are required! I have had -0- – nil, nada, automatic deductions for several years.

    I suspect the illegal aliens are able to claim many dependents and therefore they pay no taxes, if they are filling out the paperwork correctly.

  • Ben Glaser says:


    To qualify for no federal tax withholding, workers have to file federal tax returns to prove that they have no tax liability. As this and other articles have noted, most undocumented workers don’t file federal tax returns for fear of attracting government attention, even though they would probably be entitled to a refund. Therefore, they cannot be eligible for no withholding, and payroll taxes most likely are deducted automatically from their paychecks.

    Also, you are only partially correct when you say that withholding relates to the number dependents claimed- it actually relates to income and all deductions claimed, including dependents.

  • Gimme a break. They are ILLEGAL. Liberals have a lot of problems understanding what that means. California is nearly bankrupt…they have never seen the light. It is unbelievable that they have passed a law that he now can practice law. Citizen first and then all the rights that come with it after that. It seems pretty darn easy to understand. God, socialism and this open border mentality stink.

  • Frank Harrington says:

    This misses the most basic of points. And I come from an immigrant family.

    To begin with no one calls them ILLEGAL IMMIGRANTS anymore, now it is undocumented worker. No they are ILLEGAL. Therefore, someone who is breaking the law should not be able to practice law.

    And yes SOME ILLEGALS use fake SSN #’s and do pay these taxes, but what does that actually do? The true owner of that SSN now has to fight with the IRS because it now shows that he made more money than he actually did, and therefore now owes the IRS more in taxes. Again an ILLEGAL act. And to be sure the IRS wants the tax money first, ask questions later.

    I committed a crime 20 years ago in my youth and I am still held accountable, why should the ILLEGALS fare any better, they are breaking at least one crime every day that they are here? An ILLEGAL immigrant should not be allowed a path to citizenship or any other legal standing. They should have to go back to their country of origin and do it the LEGAL way.

  • Dave Francis says:


    A new year’s resolution for all of Congress is to demand the Obama Administration follow the “Rule of Law” and the dictates of the U.S. Constitution. It’s unprecedented the laws that have been encroached by the Leftist Progressive. End excessive rules and regulations by the Environmental Protection Agency. This is the first time that our country has been divided since the inception of the Civil War. Shrink government, cut the American deficit, stop illegal aliens being rewarded with citizenship; their offspring gaining immediate citizenship to supplement parent’s income. It should be a Felony to unlawfully enter this nation without permission. Currently on the Socialist menu for illegal immigrants is granting the privilege of a driver’s license, and now a right to practice law? WHATS NEXT AN ILLEGAL ALIEN POLITICIAN?

    Still millions of Americans are jobless, yet special interests want to import another 30 million into the country; already 1 million plus arrive annually. If the Justice Department followed the law, and we tracked illegal aliens and deported them, those jobs would be quickly filled by neglected low income Americans; thousands would no longer need unemployment benefits, except the parasites that live off their taxpayer host. Let us introduce a biometric Social Security Card ID to halt foreigners from stealing jobs, collapse non-citizens from voting in our election and criminals and foreign nationals gaining access to our credit profiles. Introduce a referendum for a FLAT TAX. In conclusion the theft of tax payer dollars by the IRS to support “deadbeats” and the corruption that is rampant in the halls of Congress and state legislators must end. ALL laws governed by the Constitution will be fulfilled by the TEA PARTY.

    ALERT: House speaker Boehner pushing to revamp immigration system, hires Gang of Eight advisers. Fax Congress – Tell them to secure the borders first! http://petitions.conservativeactionalerts.com

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