How Much Taxes Did Immigrants Pay in 2024: What Most People Get Wrong

When people talk about the "cost" of immigration, the conversation usually stops at the border or stays stuck on how much public services cost. But there’s a massive, multi-billion-dollar hole in that narrative. Honestly, if you look at the actual receipts, the numbers are staggering. In 2024, the IRS and nonpartisan researchers like the Institute on Taxation and Economic Policy (ITEP) released data showing that the fiscal contribution from the immigrant community is arguably one of the biggest engines keeping the American economy's lights on.

So, how much taxes did immigrants pay in 2024? While we’re currently in 2026, looking back at the 2024 fiscal year data gives us the clearest picture of this economic powerhouse. According to a landmark study released by ITEP in mid-2024, undocumented immigrants alone contributed roughly $96.7 billion in federal, state, and local taxes in a single year. That’s nearly $100 billion from a group of people who are, by law, barred from accessing many of the programs those very tax dollars fund.

The $100 Billion Reality Check

Most people think if you don't have a Social Security number, you don't pay taxes. That’s just not true. People use something called an ITIN (Individual Taxpayer Identification Number). Basically, it’s a way for the IRS to collect money from people who aren't eligible for an SSN.

In 2024, the IRS reported its gross collections exceeded $5 trillion for the first time. A significant chunk of the "hidden" revenue in there comes from immigrant labor. For the undocumented population specifically, that $96.7 billion figure breaks down into some pretty surprising buckets. About **$59.4 billion** went straight to the federal government. The remaining $37.3 billion stayed with states and localities to pay for things like roads, police, and fire departments.

You’ve gotta realize that this isn't just about income tax. Immigrants, regardless of their status, pay into the system every time they walk into a store. ITEP’s data shows that about 46% of the state and local taxes paid by undocumented people come from sales and excise taxes. They’re buying groceries, clothes, and gas just like everyone else.

Where Does the Money Actually Go?

The part that really trips people up is the payroll tax. This is money taken directly out of a paycheck before the worker even sees it. In 2024 reports covering the previous fiscal periods, it was revealed that undocumented workers paid:

• $25.7 billion into Social Security.
• $6.4 billion into Medicare.
• $1.8 billion into unemployment insurance.

Here’s the kicker: they can’t claim these benefits. They’re essentially paying for other people’s retirement. The Social Security Administration keeps track of this in something called the "Earnings Suspense File." It’s basically a massive pile of money where the names don't match the numbers, and it has grown by billions because of immigrant contributions.

Why Some States Benefit More Than Others

It’s not an even split across the country. Some states are seeing massive windfalls from immigrant taxpayers. In 2024, six states each brought in over $1 billion from their undocumented residents alone.

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1. California: $8.5 billion
2. Texas: $4.9 billion
3. New York: $3.1 billion
4. Florida: $1.8 billion
5. Illinois: $1.5 billion
6. New Jersey: $1.3 billion

It’s interesting to note that in 40 different states, undocumented immigrants actually pay a higher effective tax rate than the top 1% of households in those same states. When you’re at the bottom of the income ladder, sales tax hits your wallet much harder as a percentage of your total income. While a billionaire might pay a tiny fraction of their wealth in sales tax, a construction worker or farmhand is spending nearly every dollar they earn back into the local economy.

The ITIN Bottleneck

The IRS isn't exactly making it easy, either. In late 2024, a report from the Treasury Inspector General for Tax Administration (TIGTA) pointed out some major hurdles in the ITIN program. They found that while hundreds of thousands of people are trying to get these numbers to pay their taxes "the right way," the process is a nightmare of paperwork and rejections.

Despite these hurdles, the median income for ITIN filers was around $31,033. These are folks working hard in low-wage sectors—agriculture, hospitality, construction—and still making sure Uncle Sam gets his cut. Honestly, the level of compliance is pretty high considering the lack of any "reward" at the end of the line.

What Happens if Status Changes?

The Congressional Budget Office (CBO) put out some projections in 2024 that gave us a glimpse into the future. They estimated that the recent surge in immigration would boost the U.S. GDP by about $8.9 trillion over the next decade.

If the current undocumented population were given work authorization, the tax revenue wouldn't just stay the same; it would explode. ITEP estimates it would jump by $40.2 billion annually. Why? Because people with legal status tend to earn higher wages and are more likely to be fully "on the books."

Practical Insights and Next Steps

If you’re trying to wrap your head around the economic impact of immigration, don't just look at the headlines. Look at the balance sheets. Here is what the 2024 data actually tells us for moving forward:

• Acknowledge the Sales Tax Factor: Even if someone isn't filing a 1040, they are contributing to your state's infrastructure every time they buy a loaf of bread.
• Understand the "Gift" to Social Security: The billions paid into the SSA by those who can't collect are a significant reason the system hasn't faced a crisis even sooner.
• Local Policy Matters: States like California and New York that provide more inclusive tax credits often see higher rates of filing, which paradoxically leads to more revenue for the state.
• Tax Prep Support: For those in the immigrant community, using VITA (Volunteer Income Tax Assistance) sites can help navigate the ITIN process without getting scammed by "ghost" preparers.

The debate over immigration isn't going away, but it’s helpful to ground it in the reality that the U.S. Treasury would look very different without the contributions made in 2024. Whether it's the $7 billion in personal income taxes or the $10 billion in property taxes (yes, even renters pay this through their landlords), the fiscal footprint of immigrants is deep and wide.

To get a full picture of your own state's data, you can look up the "ITEP Undocumented Tax Map" which breaks these billions down by zip code and tax type. Keeping an eye on the IRS Data Book for the upcoming fiscal years will show if this upward trend in contributions continues as the labor market evolves.