NEW — 2024 REPORT JUST RELEASED
California’s Undocumented Residents Make Significant Tax Contributions
SACRAMENTO, CA — A new in-depth national study by the Institute on Taxation and Economic Policy (ITEP) highlights the significant contributions of undocumented immigrants to state and federal revenues despite their exclusion from most public benefits.
In California, undocumented immigrants contributed $8.5 billion in state and local taxes in 2022 — a number that would rise to $10.3 billion if these taxpayers were granted work authorization, according to the new ITEP study.
Key findings:
- Nationally, undocumented immigrants contributed $96.7 billion in federal, state, and local taxes in 2022. Of this, $37.3 billion went to state and local governments.
- For every 1 million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue.
- Nationally, providing access to work authorization to all current undocumented immigrants would increase their tax contributions by $40.2 billion annually, to $136.9 billion.
- More than a third of the tax dollars paid by undocumented immigrants are toward payroll taxes dedicated to funding programs — like Social Security, Medicare, and Unemployment Insurance — that undocumented workers are barred from accessing.
- Similarly, income tax payments by undocumented immigrants are affected by laws that require them to pay more than otherwise similarly situated U.S. citizens; as one example, they are barred from receiving meaningful federal tax credits like the Child Tax Credit or Earned Income Tax Credit.
“This study is the most comprehensive look at how much undocumented immigrants pay in taxes. And what it shows is that they pay quite a lot, to the tune of nearly $100 billion a year,” said Marco Guzman, ITEP Senior Policy Analyst and co-author of the study. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”
In California, 46% of the state and local tax contributions are through sales and excise taxes, 31% are through property taxes, and 21% are through personal or business income taxes.
California is among several states that have made certain state programs, like earned income tax credits, accessible to eligible undocumented workers. However, this is a small expenditure compared to the billions of dollars that immigrants contribute to public revenues.
“This study underscores the remarkable contributions undocumented Californians make to communities across the state. They significantly support state and federal programs through their taxes, yet they remain unjustly excluded from many of the benefits they help fund,” said Mauricio Torres, a spokesperson for the California Budget & Policy Center.
While this study is the most comprehensive analysis of taxes paid by undocumented immigrants, it is worth noting that it does not attempt to quantify broader impacts that flow from the increased economic activity created by these individuals. Taking those economic ripple effects into account would likely reveal that undocumented immigrants have an even larger significance in public revenues than is documented in the new report.
This study is another reminder that undocumented immigrants are contributing to our economies and the shared public services we all rely on. The immigration policy choices made in the years ahead will have significant consequences for public revenues and the US economy.
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Media Contact: Jon Whiten, jon@itep.org
About the Institute on Taxation and Economic Policy:
ITEP is a non-profit, non-partisan tax policy organization conducting rigorous analyses of tax and economic proposals and providing data-driven recommendations to shape equitable and sustainable tax systems.
About the California Budget & Policy Center:
The California Budget & Policy Center (Budget Center) is a nonpartisan research and analysis nonprofit advancing public policies that expand opportunities and promote well-being for all Californians.
