Do Illegal Immigrants Pay Income Taxes?

During my last 12 years in the US, I have worked for different companies ranging from construction to landscaping and health supplements. Along the way, I have had the opportunity to work with many legal and illegal immigrants. Since I have always taken employment by legal means, I cannot talk about personal experiences but instead I will refer to what I have witnessed during my work journey.

It is true that a majority of illegal immigrants do not file income taxes as required by law, but this does not necessarily mean that they do not pay income taxes. Employers are required by law to withhold income taxes from their pay checks. So what happens when illegal immigrants do not file taxes? Because illegal immigrants do not have a social security number, some of them work with a fake number, filing taxes is not an option, or at least I am not aware of it. Many fear that filing income taxes will expose them to government officials and hence being prone to deportation.  Their income level is usually low so if illegal immigrants filed income taxes, they would likely get a refund which in turn would leave our government with less money. We also need to take into consideration that these people have no access to Social Security and Medicare benefits even when they are contributing to it. So who benefits from their contribution?

There is a group of illegal immigrants that may not contribute as required by law. I recall working with a young immigrant who was about 20 years old; he claimed to have 8 dependants in order to make his deduction as low as possible.

In many instances when income taxes are not paid by illegal immigrants, it is because they are paid cash for the work performed. I still do not understand why an employer would pay cash as they cannot claim the expense; the truth of the matter is that it does happen often.

Some people are not aware of the fact that employers withhold income taxes from illegal immigrants. What we may never know is whether other benefits received by illegal immigrants outweigh the tax, Social Security and Medicare contributions they make.

Do you think we benefit from income taxes paid by illegal immigrants?

About Alberto Galdamez
Alberto Galdamez, a United States citizen formerly from El Salvador, shares his success story from being an immigrant to reaching the American dream. His purpose is to encourage immigrants to integrate to the American culture.

2 Responses to Do Illegal Immigrants Pay Income Taxes?

  1. Hey Al, I’ve seen this many times. As a employer in the landscaping industry I have to be very careful. I always make my employees fill out I-9’s and show me documentation. On top of that, I always keep and retain copies. I usually keep the same help, but my type of work is very seasonal so sometimes I only keep help for one season. At the beginning of the year I send W-2’s to the employees and W-3 to social security. On one or two occasions, I’ve gotten a letter back from Social Security stating that they could not find that person or SSN number. Those people will never see the Medicare and SS benefits they paid for and I matched.

    • Hi Daniel, thanks for reading my post. It is a touchy subject but many do not realize that many illegal immigrants actually pay taxes. Question for you, if social security sends a letter saying the SSN provided is invalid; do they still keep the money contributed by these people? Whats your experience?

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