You may be wondering, can undocumented immigrants file tax returns without a social security number, and how do undocumented immigrants pay taxes if they can?
Undocumented immigrants can, in fact, pay their taxes in the United States. The Federal Government specifies that paying taxes and filing a tax return is necessary for all people working and having an income within the United States of America
, regardless of the person's immigration status.
We outline the answers to your questions regarding filing taxes for undocumented immigrants and how they do it without a Social Security Number.
How Do Undocumented Immigrants Pay Taxes Without a Social Security Number?
A tax identification number is mandatory to pay taxes. The most common identification number used to pay taxes is a Social Security Number.
It is important to note that undocumented immigrants do not qualify for an SSN.
Only some groups of immigrants qualify for an SSN, depending on their circumstances:
- lawful permanent residents ("green card holders")
- people granted asylum ("asylees”)
- refugees; people who have a certain kind of visa that allows them to work in the United States
- people who naturalized and became a U.S. citizen
An undocumented immigrant or another immigrant not in one of these groups will likely not be able to get an SSN.
However, an undocumented immigrant can apply for an Individual Tax Identification Number (ITIN).
Learn what you can do with your ITIN number
What is an ITIN?
The individual taxpayer identification number or an ITIN is a nine-digit tax processing number that the IRS issues to a person to pay federal taxes.
The IRS issues ITINs to people that need a similar document to the SSN. The U.S. government's tax agency, the IRS, gives ITIN numbers to foreign nationals working in the U.S. and paying taxes.
You can apply using the IRS online website or have a certified acceptance agent submit your application for a fee.
You can also use ITIN numbers for other purposes.
For example, with an ITIN, an undocumented immigrant will have an identification number that may help them to establish their identity to apply for a bank account, credit card, business loan, or mortgage.
Bear in mind that an ITIN does not legally authorize a person to work in the U.S. According to the IRS, this number is available for "certain nonresident and resident aliens, their spouses, and dependents who cannot get a social security number."
ITIN number for undocumented immigrants: when and how do you file it?
Undocumented immigrants can apply for an ITIN by filing federal taxes.
In other words, using an ITIN and filing taxes are possible to complete simultaneously. Remember, federal taxes are generally due on April 15th every year.
Steps for undocumented Immigrants To File Taxes
The first step is to get a tax identification number, also known as an Individual Taxpayer Identification Number (ITIN).
You can apply for an ITIN
by filing Form W-07 with the IRS.
Once you have your ITIN, you must file a federal income tax return.
Even if you did not earn enough money, you would require to file a return; it is still recommended that you do so.
This is because filing a return is the only way to get a refund of any taxes that were withheld from your paychecks during the year.
To file your federal income tax return, you will need to use Form ITR. This form will list your total income for the year and any deductions or credits you are eligible for.
Once they file your return, you will need to wait until the IRS processes it. This process can take up to several months, so be patient!
When the IRS processes your return, you will receive a notification from the IRS stating whether or not you owe any money. You will need to pay this amount immediately if you do owe money.
Several options are available if you cannot pay your tax bill in full. You can set up a payment plan with the IRS, or you may be able to get a loan from a private company.
Finally, if all else fails, you may be able to declare bankruptcy.
Why do Undocumented Immigrants Typically Not Pay Taxes?
There are a few key reasons why undocumented immigrants don't always pay taxes. First and foremost, many undocumented workers get paid "under the table" in cash, which means they do not withhold taxes from their paychecks.
This means that if they pay into Social Security and Medicare through taxation but do not reap any benefits from those programs, it's not a very attractive for them.
When do Undocumented Immigrants Typically Pay Their Taxes?
Many undocumented immigrants pay rent or own homes, which means they are paying property taxes.
Also, undocumented workers often buy goods and services like everyone else, which means they also pay sales taxes.
What Are The Benefits Of Filing Taxes For Undocumented Workers?
First, filing taxes benefits immigrants because it allows them to comply with the law requiring that all individuals who earn wages file taxes to the federal government.
It can help in an immigration court
Filing taxes helps immigrants because it allows them to build a record of their history of paying taxes for several years in the U.S., which can be helpful for immigration reasons.
If a person ever has to go to immigration court, showing an immigration judge that they have been paying taxes could be beneficial.
This is because, in immigration court, immigrants must defend against deportation. Undocumented immigrants pay taxes to get different benefits in the future-
Several types of defenses require the immigration judge to use their discretion to determine if the person warrants relief from deportation, which involves looking at all the positive and negative factors in someone's life to decide whether they should be able to stay in the country.
For example, having a record of paying income taxes can help show that they are a responsible and contributing member of society with strong equities.
This type of evidence can help persuade an immigration judge to exercise their discretion to grant someone a defense to deportation in an immigration case.
Legal immigration status changes
Filing taxes can also be helpful if a person is applying for a green card to become a lawful permanent resident or to naturalize to become a U.S. citizen.
For example, a person can include copies of their tax returns in their green card application or naturalization application.
A history of tax filings will also provide an immigrant an official record to help show that they qualify for any potential immigration reform that may be present in the future.
We do not know if this kind of immigration system or reform will ever happen in the future, but it is possible that someday immigration reform could happen in the coming years.
In the past, the immigration system has looked into the time that people have been living in the U.S. and required people to establish that they've been living in the country by a certain date and for a certain number of years.
Showing copies of a person's tax returns can help them show a "paper trail" to establish they were living in the country during specific essential dates.
Some of the proposed legislation for immigration reform that Congress has considered in recent years has also included provisions that immigrants have paid taxes as a requirement to obtain status.
For these reasons, there are many potential immigration benefits for non-regulated immigrants to file taxes. Another advantage is to start or continue investing as an immigrant.
Can An Undocumented Person Get Immigration Officials' Attention By Filing Taxes With An ITIN?
No, it's generally safe for undocumented immigrants to apply for ITINs without having to worry about drawing the attention of immigration officials.
This is because solid privacy protections prohibit the IRS from disclosing taxpayer information.
There is also a clear separation between the federal government's immigration agency (the U.S. Department of Homeland Security and the Immigration and Customs Enforcement or ICE) and the government's tax agency, the Internal Revenue Service (IRS).
However, considering some administrations may change the current processes or systems. It is essential to consider the benefits and risks of filing taxes.
There is no guarantee that unauthorized immigrants will never face immigration consequences due to filing taxes in the future.
For example, if the laws change in the future, there could be potential risks.
It is worth noting that the U.S.'s immigration and tax laws have different focuses.
The IRS's purpose is to collect taxes and encourage people to continue filing taxes.
Therefore, from the IRS' perspective, it does not matter if a tax filer has a legal immigration status or not.
While ICE's (Immigration and Customs Enforcement) mandate is to carry out deportations of undocumented immigrants, the IRS does not share information with ICE under current law.
As explained by the Bipartisan Policy Center, "Addressing these conflicting interests would require legislative change and implicate millions of taxpayers, which means the current state of affairs will likely prevail for the foreseeable future."
According to the Bipartisan Policy Center, the tax information of undocumented immigrants who file taxes through an ITIN is:
- It is legally protected under privacy laws and is not allowed to share with the Department of Homeland Security or Immigration and Customs Enforcement.
- Thus, an undocumented worker can obtain one without fear, knowing the information is not shared and is not used to find and deport them.
While this disconnect is a source of ongoing tension between the agencies, sharing this information would require legislative action—either a new law or an amendment to the Immigration and Nationality Act.
Why would an undocumented immigrant consider filing taxes if there is a potential risk?
Ultimately, if an undocumented immigrant files taxes with an ITIN instead of a Social Security Number, it could signal to the government that they do not have immigration status.
While the government doesn't use that information to deport immigrants currently, we don't know if that could change in the future.
However, we know that change would require Congress to pass a new and drastic law, which currently looks pretty improbable.
As described above, there are advantages to filing taxes for unauthorized immigrants, such as supporting a defense to deportation in immigration court.
Also, it can help with getting status through potential immigration reform in the future.
However, it is ultimately up to each person to weigh the potential benefits and potential risks of filing taxes. Therefore, only each individual can make the right decision for themselves.
The benefits of having an ITIN number and paying taxes are more significant than the risks.
For example, getting a small business loan would be impossible in a bank.
What Happens If An Undocumented Immigrant Uses A Fake SSN
Employers are legally responsible for hiring individuals authorized to work in the U.S. However, according to the IRS, employers can face stiff monetary penalties when they fail to follow immigration and taxation guidelines
At the time of employment, an employer verifies a person's eligibility to work in the U.S. by filing Form I-9 and getting a copy of the employee's social security card.
Employers that hire undocumented immigrants pay them wages and deduct federal and payroll taxes, which they deposit and report to the Social Security Administration and the Internal Revenue Service.
If the social security number doesn't match the employee's name on a W-2, one or both agencies notify the employer.
The employer can either correct the error or be subject to civil penalties.
Undocumented immigrants should not use a fake or someone else's social security number.
If convicted of identity theft, they could face jail time, deportation, or jeopardize their future legal status.
Do Undocumented Immigrants Collect Benefits?
Foreign-born individuals who do not have valid immigration documentation may be eligible for benefits in 26 states
For example, they may receive healthcare assistance through New York's Safety Net Assistance or California's food and cash assistance programs.
The 1996 welfare law categorized immigrants into two groups: qualified and not qualified
. The not qualified group, undocumented immigrants, has limited access to federal programs
- The Children's Health Insurance Program (CHIP)
- Temporary Assistance for Needy Families (TANF)
- Supplemental Nutrition Assistance Program (SNAP)
- Supplemental Security Income Income (SSI)
Undocumented immigrants may be eligible for benefits that protect their lives, such as:
- Emergency Medicaid
- Services at emergency care facilities
- Access to nutrition programs that benefit women, infants, and children
Undocumented immigrants may also be eligible for
- Child and protective services
- Homeless shelters
- Soup kitchens
- Public health services
Nonprofit charities do not need to verify the immigration status of the people they serve.
What Are Federal Benefits Undocumented Immigrants Eligible For?
||Eligible to public health programs such as immunizations and communicable disease treatments
||Not eligible for Federal programs, but some states cover OBGYN care to include labor, delivery, prenatal, and postpartum services
||A person's immigration status doesn't restrict school food programs available to all children.
|Emergency Disaster Asistance
||Short-term, non-cash assistance and in-kind services available to protect life or safety in emergencies and weather-related disasters
||Only available in emergencies
||Only immigrant parents with an ITIN are eligible for the Child Tax Credit
Learning How Undocumented Immigrants Pay Taxes
For some undocumented workers, the benefits and the importance of filing taxes are less significant than the potential risks.
In addition, undocumented immigrants assume that the current law that maintains privacy over people's IRS tax information and keeps that information separate from immigration officials could change in the future.
For others, however, the risk may be too small. They don't want to give up the chance to develop evidence that could help them in immigration court if a positive immigration reform ever happens.
The vast majority of immigrants pay taxes hoping that doing so could help them become U.S. citizens.
Also, it is essential to note that undocumented immigrants pay social security payroll taxes but are not eligible for benefits
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Tax deadlines you need to know
Can a deported person file their taxes?
Many lawyers will state that it won't matter if the government deported a person; the individual still needs to comply with their obligation to pay taxes.
But you should know that all situations are different. Therefore, we recommend contacting a professional lawyer to advise you on proceeding.
If you're worried that you might get deported for filing your taxes, don't worry. The IRS can't legally disclose your status to anyone.
Do non-permanent residents pay taxes?
Green card holders and non-immigrant visa holders must report their income on a U.S. tax return and pay any tax due based on guidelines.
Green card holders are permanent residents subject to the same taxation laws as U.S. citizens.
To pay taxes, non-immigrant visa holders must be in the U.S. physically for at least 31 days in the current year or 183 days within three years based on specific guidelines.
Do non-American citizens pay taxes?
Technically, no. Non-US citizens are not required to pay taxes to the U.S. government. However, if they are employed in the U.S. or earn income from U.S. sources, they may be required to pay taxes to the Internal Revenue Service (IRS).
Additionally, non-US citizens who own property or engage in business in the U.S. may also be subject to state and local taxes.
Can an undocumented immigrant get a tax identification number?
According to the IRS, "unauthorized immigrants, lawfully present individuals, and U.S. resident aliens/nonresident aliens" are eligible to apply for an ITIN.
How can an undocumented immigrant become legal in the U.S.?
There are a few ways an undocumented immigrant can become legal in the United States.
They can get a green card through a family member who is a U.S. citizen, get a job that sponsors them for a green card, or applies for asylum if they are fleeing persecution in their home country.
Can you file taxes if you are an undocumented immigrant?
Undocumented immigrants legally working and receiving wages must pay taxes on their income the same as U.S. citizens.
Because their immigration status prevents them from qualifying for a social security number, applying and receiving an ITIN allows non-U.S. citizens to submit a tax return and pay any tax they owe to the federal government.
Does the IRS care about my immigration status?
The Internal Revenue Service is interested in enforcing Internal Revenue Code and tax laws. There are confidentiality rules to protect a taxpayer's information and immigration status.
Can I hire an undocumented immigrant with an ITIN number?
Legally, anyone that doesn't have legal status is not permitted to work as an employee for an employer. However, there are a few exceptions.
Individuals with Deferred Action, Temporary Protected Status, or an immigration case pending work authorization. Examples include a person applying for a green card and waiting for a decision, or someone applying for asylum can work temporarily.
How much does it cost to get an ITIN number?
It depends on where you apply. There is no charge if you fill out and submit form W-7 through the IRS website. However, third-party certified acceptance agents set their fees and charge amounts ranging from $125 to $1,000 or more.
What taxes do undocumented immigrants avoid?
There are a few taxes that undocumented immigrants may try to avoid. One is the income tax. Many people in the country illegally may work off the books, so they don't have to pay income taxes.
They also may not report all of their income, which could lead to underpaying or not paying taxes.
Another tax for undocumented immigrants may try to avoid the Social Security tax. This tax helps fund retirement and disability benefits for Americans. Some people illegally may not want to pay it because they're not eligible for these benefits.
Finally, some undocumented immigrants may try to avoid sales taxes by not buying anything or smuggling goods into the country.
Do undocumented immigrants file tax returns?
There is no definitive answer to this question. Generally speaking, undocumented immigrants are not legally required to file tax returns, but there are many reasons to do so anyway.
For example, many undocumented immigrants earn cash income, which means they may be unable to take full advantage of all the tax credits and deductions available to them. Filing a tax return would help ensure they get the most out of their money.
How much taxes do undocumented immigrants pay in the U.S.?
Undocumented immigrants pay billions, they contribute around $11.7 billion per year in state and local taxes. This is a significant contribution, particularly given that these immigrants are in the country illegally and typically working low-paying jobs.
Clearly, illegal immigrants contribute significantly to the overall economy by paying billions of dollars in taxes yearly.