Immigrants & Taxes

Antonio Martinez, EA

Immigrants in the U.S.

• More immigrants than any other country in the world
• 51.8 million immigrants (both legal and illegal)
• 15.2% of the U.S. population
• About every country in the world represented

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https://www.pewresearch.org/race-and-ethnicity/2025/08/21/u-s-unauthorized-immigrant-population-reached-a-record-14-million-in-2023/

Unauthorized Immigrants

• 27% or 14 million are unauthorized
• Highest ever recorded for unauthorized immigrants�
• 1990 to 2007, unauthorized immigrant population tripled
• 3.5 million to 12.2 million
• 1 million decline during the Great Recession
• 3.5 million INCREASE in 24 months (2021 - 2023) !

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Immigrants in the Workforce

• 33 million immigrants
• 19% of the total labor force
• 23 million are lawful
• 10 million are unauthorized – 6% of labor force
• Who gets an ITIN? Do they get the Child Tax Credit?

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https://www.pewresearch.org/short-reads/2025/08/21/key-findings-about-us-immigrants/

Is Your Client an Alien?

• Non U.S. citizens are Aliens
• Nonresident Alien or Resident Alien
• Green Card Test
• Substantial Presence Test

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Green Card Test

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• Lawful Permanent Resident

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• USCIS issued you an alien registration card

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• Form I-551 also known as a “green card”

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Substantial Presence Test

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• 31 days during the current year

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• 183 days in last 3 years, including current year

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• Count all days in current year
• 1/3 days in previous year
• 1/6 days in year before that

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Substantial Presence Test - Jose

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• Jose is undocumented (unauthorized)

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• Jose arrived in 2009

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• Jose does not meet the Green Card test�
• Jose meets the substantial presence test

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• An undocumented immigrant can be a resident!

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What is an ITIN?

• Tax processing number issued by the IRS
• Individuals who do not have or qualify for a SSN
• Help individuals comply with tax laws
• Issued regardless of immigration status
• Residents or Nonresidents may have a U.S. filing requirement
• Only purpose is to file a tax return

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What an ITIN is Not

• Cannot be used for purposes other than tax administration
• Does not authorize an individual to work in the U.S.
• Is not valid for identification outside of the tax system
• Does not permit claims for the Earned Income Tax Credit
• NEW: Does NOT permit claim for Child Tax Credit!

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Juan’s Household

• Juan is unauthorized (ITIN)
• Wife is legal resident (SSN)
• 1 Citizen children (SSN)
• 1 DACA child (SSN)
• 1 unauthorized child (ITIN)

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Earned Income Tax Credit

• Family does not qualify
• Juan does not have a social security number
• Be careful with married clients trying to file separate
• Follow due diligence

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Child Tax Credit

• DACA and citizen child DO qualify for child tax credit
• NEW – social security requirement for Child Tax Credit
• ITIN child does not qualify for the Child Tax Credit
• Juan having an ITIN doesn’t matter because wife has SSN!

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$500 Other Dependent Credit

• Non-refundable credit
• Can an ITIN dependent receive this credit?
• ITIN child who does not qualify for CTC?
• ITIN dependent in Mexico or Canada?
• Does the dependent need to live in the U.S. with taxpayer?

The dependent must be a U.S. citizen, U.S. national, or U.S. resident alien.

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Publication 3535

DACA Recipients

• Deferred Action of Childhood Arrivals (DACA)
• Not lawfully present
• DACA recipients are eligible for SSNs
• May be eligible for EITC benefits

Form I-766

• Employment Authorization Document (EAD)

Temporary Protected Status

• Lawfully present in the U.S.
• May apply for work permit
• Employment Authorization Document (EAD)
• Eligible for EITC, ACTC, etc with valid SSN
• TPS is Temporary and may be revoked at any time
• NEW: Venezuelan citizens subject to TPS termination

Key Takeaways

• Majority of immigrants are lawful
• ITIN is for tax purposes only
• Unauthorized taxpayers can be residents
• Ask your clients if they have a special visa or work authorization status