There is a common misconception that undocumented immigrants who earn wages do not pay taxes because they don’t have a social security number. However, this couldn’t be further from the truth. The reality is that undocumented immigrants have tax responsibilities just like any U.S. citizen or a legal permanent resident. While undocumented individuals may not qualify to file and pay taxes with a social security number, they can obtain an Individual Taxpayer Identification Number (ITIN). An ITIN works like a social security number for the purpose of filing taxes only. When non-U.S. citizens plan to adjust their immigration status, using an ITIN to file and pay taxes on wages earned can help them demonstrate a “good moral character” in the eyes of the law.
Individual Tax Identification Number or ITIN
The ITIN or Individual Tax Identification Number is a tax processing number issued by the Internal Revenue Service (IRS). It allows undocumented workers to fulfill their fiscal responsibilities, something that the Immigration Service requires as evidence at the moment when a non-U.S. citizen decides to initiate the adjustment of status process in the country.
Tracking the history of paying taxes in the United States through an ITIN helps experienced immigration attorneys put together a stronger case. Immigration courts evaluate a person’s life history in the country as a whole, and the “good moral character” reflected in a history of paying taxes helps. If you fall into any of the following categories, you may qualify to obtain an ITIN:
Immigrants without lawful status in the United States
Non-US residents, who live outside of the United States and receive income from owning or investing in a business in the country
Foreign students who qualify as residents
Dependents or spouses of a U.S. citizen or legal permanent resident or foreigner on a temporary visa
How can an undocumented immigrants pay taxes?
If you are an undocumented immigrant who works in the United States, you must pay taxes on your income using an ITIN. The moment you file your taxes, you may be able to begin to reap benefits even if you do not benefit from the social security taxes paid. For instance, demonstrating that you have paid taxes in the past can help with cases such as cancellation of removal from the United States in deportation court cases. It can also help to qualify for future eligibility for immigration benefits. Legally, a candidate for immigration benefits who pays taxes is more likely to be considered to have “good moral character”. Filing taxes in the United States can also serve as evidence of how many years you have been living in the country. It shows that you earn an income and would not become a “public charge”. More importantly, it works as evidence that you support the country and local government by paying income taxes, which provide funding for public schools, roads, and other public services that we all benefit from.
What is an ITIN good for, and what is not good for?
While an ITIN and a solid tax filing history can help build a strong case for an adjustment of status, it does not guarantee immigration benefits. At STERN Law, we are often asked about what the ITIN is and is not. Here is a list of frequently asked questions:
Can the ITIN be used to locate non-us citizens and deport them?
No. Immigration Services may not use the ITIN to search for non-U.S. citizens who are in the country without permission. It is issued by the Internal Revenue Service (IRS), and they do not share private information with any other departments, even immigration services. The IRS wants to encourage that even undocumented foreign workers pay taxes.
How will my immigration attorney use the ITIN to benefit my case?
The ITIN and the taxpayer history serves as one of the best pieces of evidence to show “good moral character” and establish eligibility for processes such as citizenship, naturalization, and adjustments of migratory status. Filing taxes in the United States serves as evidence of how many years you have been living in the country. It also shows that you earn an income and would not become a “public charge.”
Can the ITIN be used to prove legal residency or citizenship?
An ITIN can be used to establish proof of physical presence in the U.S. However, having a tax identification number, alone, does not serve to verify legal presence in the country nor provides you with authorization to work in the United States. You have to file your taxes each year to prove you have earned an income within the U.S. and that you were physically present residing in the U.S. during that time.
Can the ITIN help me request social security benefits?
In some cases, yes. Having an ITIN does not qualify you for social security benefits, but if you become a lawful permanent resident in the United States, and you properly report income through your ITIN, you may be eligible to have Social Security Benefits once you become a U.S. citizen.
Can I receive tax credits through an ITIN?
Yes. Having an ITIN can make you eligible for a child tax credit.
Can I open a bank account with an ITIN?
Yes. Having an ITIN allows you to open a bank account that can earn interest.
Can I obtain a driver’s license with an ITIN?
Maybe. In some states, it is possible to obtain a driver’s license with an ITIN; however, in most states it requires proof of legal immigration status or a valid “Employment Authorization Document” (EAD Card).
The United States has grown thanks to the positive contributions that millions of taxpayers have made to the nation. This includes non-U.S. citizens who have contributed their fair share through an ITIN. In 2015 alone, it is estimated that 4.35 million people paid over $13.7 billion in taxes using an ITIN. If you are among those who are earning wages and not paying taxes via an ITIN, then we highly encourage you to reconsider, especially if your long term plan is to stay in the U.S. permanently. If you applied for one and have not used it in over three years, you may need to reapply again. It will give you a chance to contribute to the country you wish to live in and also help your attorney build a stronger case for you to receive immigration status and benefits.