How does the tax code treat immigrant taxpayers and ITIN filers?

Immigrants are paying billions of dollars each year in taxes. In spite of their undocumented status, these immigrants—and their family members—are adding value to the U.S. economy, not only as taxpayers, but as workers, consumers, and entrepreneurs as well.

Immigrants in the U.S. contributed more than $330.7 billion in federal income taxes in 2019, and over $492 billion dollars in total taxes (including state, municipal, and sales taxes). The Tax Foundation estimates that American and immigrant taxpayers paid $1.6 trillion in individual income taxes in 2019. In this context, it’s important to note that immigrants made up only 13.5% of the U.S. population in 2020, meaning that immigrants make an outsized contribution to the U.S. revenue system.

The Individual Taxpayer Identification Number (ITIN) was created by the IRS in July 1996 to allow foreign nationals and other individuals who are not eligible for a Social Security Number to comply with U.S. tax laws and pay taxes. According to the IRS, in 2015, 4.4 million ITIN filers paid over $5.5 billion in payroll and Medicare taxes and $23.6 billion in total taxes.

  • ITIN holders are not eligible for all of the tax benefits and public benefits that U.S. citizens and other taxpayers can receive. For example, an ITIN holder is not eligible for Social Security benefits or the Earned Income Tax Credit (EITC).
  • Some ITIN holders are eligible for the Child Tax Credit (CTC).  According to federal legislation passed in March 2021, the CTC may be worth up to $3,600 for each child under 6 and up to $3,000 for each child age 6 to 17, depending upon the applicant’s income. Because ITIN holders are eligible for the CTC, the IRS estimated in 2014 that up to 4 million U.S.-citizen children of ITIN holders benefit from the tax credit. If a child does not have a SSN, he or she is not eligible for the tax credit.

See this map of states that allow ITIN holders to receive state EITC.

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