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Legal Status and Taxes: What Immigrants Need to Know

The issue of undocumented immigrants and their future in the United States has been an item of intense debate as candidates jockey for position ahead of the elections to succeed President Barack Obama.

Two outspoken candidates running on the Republican Party ticket have suggested that mass deportations would be conducted swiftly if they are elected to the White House. While this drastic proposal has found some resonance among supporters of these candidates, economists are worried about the immediate impact to taxation that mass deportations could have on the U.S. economy.

Contrary to what some people may believe, undocumented immigrants provide a substantial contribution to the total U.S. tax revenue. The Institute on Taxation and Economic Policy estimates that undocumented immigrants paid more than $11 billion in taxes in 2012. They are able to do this because the U.S. Tax Code considers most of these immigrants to be tax residents, and thus subject to taxation.

Regular taxation applies to all immigrants as soon as they receive a work permit. This taxation becomes a responsibility once conditional or permanent resident status is granted, which means that tax returns must be filed even if a green card holder is living outside of the U.S.

Tax resident status is applied to foreigners whose permanence in the United States reaches or exceeds 183 days in a year. Thereby, undocumented immigrants who skip passport control points or who overstay their visas are expected to pay taxes after six months.

When it comes to taxation, the Internal Revenue Service makes little distinction between undocumented immigrants and other taxpayers. It is understood that those who report income with an individual taxpayer identification number (ITIN) in lieu of a social security number are not entitled to certain benefits and assistance from the government, but they are still obligated to pay taxes.

Some immigrants who fall under the DACA (and possibly DAPA) programs are able to get social security numbers as they wait for comprehensive tax reform to hopefully pass in the future. These DAPA and DACA beneficiaries are also expected to pay taxes. In fact, doing so may improve their outlook as future legal residents.

Learn more about your responsibilities as an undocumented immigrant or find the help you need to apply for citizenship by reaching out to KS Visa Law. We are a trusted San Diego immigration law firm, dedicated to helping clients just like you. Call (858) 874-0711 and schedule a free immigration consultation today.

May 2024