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CALIFORNIA’S UNDOCUMENTED RESIDENTS MAKE SIGNIFICANT TAX
CONTRIBUTIONS  
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Kayla Kitson
October 30, 2024
California Budget & Policy Center
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_ California’s undocumented residents contribute nearly $8.5
billion in taxes, playing a crucial role in supporting public services
while remaining excluded from essential programs. _

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All Californians should be able to live thriving lives and participate
in their communities, regardless of their race, ethnicity, age, gender
identity, sexual orientation, ability, or immigration status.

California is home to a sizable population of immigrants — with and
without legal status — who are students, teachers, artists, chefs,
business owners, religious leaders, colleagues, neighbors, family
members, and more. Undocumented Californians pay billions of dollars
in taxes and play a vital role in stimulating California’s economy
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They help keep businesses running, put food on tables, care for
children and loved ones, enrich communities through art and music, and
much more.

Tax Contributions by Undocumented Californians

One contribution that is often overlooked or underestimated is the
amount of taxes that individuals who are undocumented are paying into
publicly-funded systems to support public services, even as they are
excluded from benefiting from many of those same services.

Undocumented Californians paid nearly $8.5 billion in state and local
taxes  [[link removed]]in 2022,
according to estimates from the Institute on Taxation and Economic
Policy (ITEP). This includes the sales and excise taxes paid on
purchases, the property taxes paid on homes or indirectly through
rents, individual and business income taxes, unemployment taxes, and
other types of taxes.

These tax contributions support the public services and infrastructure
that benefit all Californians, such as education, roads and transit,
emergency response, and the social safety net. However, despite recent
progress in making some public supports more inclusive of Californians
regardless of their immigration status, many programs continue to
unjustly exclude undocumented individuals and families who pay into
these systems and seek support in times of need.

California has taken steps in recent years that recognize the
importance of supporting _everyone _regardless of status, including:

* Expanding full-scope Medi-Cal health coverage to all eligible
Californians regardless of immigration status. We are already seeing
signs of benefits from making Medi-Cal more inclusive: After
full-scope Medi-Cal was expanded to undocumented children, the share
of non-citizen children reporting excellent health status increased
by 10 percentage points
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no changes were seen for citizen children not impacted by the
expansion.
* Ending the exclusion of tax filers with Individual Taxpayer
Identification Numbers (ITINs) from the benefits of the state’s
refundable tax credits — the CalEITC and the Young Child Tax Credit.
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* Taking the first steps to provide access to nutrition benefits
through the California Food Assistance Program (CFAP) for undocumented
adults age 55 and older, who are excluded from receiving federally
funded Supplemental Nutrition Assistance Program (CalFresh in
California) benefits. However, the 2024-25 state budget 
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the implementation of this expansion until 2027.

Despite this progress, Californians without documentation remain
excluded from many critical supports, jeopardizing their health and
economic security. While many of these exclusions stem from federal
law, state leaders can further support these Californians by using
state resources to end the exclusions. State policymakers should:

* ENSURE UNDOCUMENTED WORKERS HAVE ACCESS TO UNEMPLOYMENT
SUPPORT when they lose a job by funding cash assistance for workers
excluded from traditional unemployment insurance benefits. The
Legislature recently passed a bill to require the Employment
Development Department to develop a plan to establish an Excluded
Workers Program, but the governor vetoed the bill citing concerns
about the cost and the deadline set in the bill.
* ADDRESS FOOD INSECURITY IN UNDOCUMENTED COMMUNITIES BY EXPANDING
CFAP nutrition benefits to undocumented Californians of all ages.
* BUILD ON THE SUCCESS OF ENDING MEDI-CAL EXCLUSIONS BY EXPANDING
ACCESS TO HEALTH COVERAGE THROUGH COVERED CALIFORNIA to undocumented
families whose income make them ineligible for Medi-Cal.
* EXPAND THE CASH ASSISTANCE PROGRAM FOR IMMIGRANTS (CAPI) to
undocumented older adults and people with disabilities whose
immigration status disqualifies them from receiving Supplemental
Security Income/State Supplementary Payment (SSI/SSP). 
* INCREASE FUNDING FOR FREE TAX PREPARATION SERVICES to enable more
undocumented Californians to apply for and renew ITINs and file income
returns — allowing them to pay the taxes they owe and receive the
tax credits they are eligible for.

Exclusions from these vital services are one contributor to
the higher rate of poverty
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undocumented Californians. This results in unnecessary human suffering
and additional strains on community services that people use as a last
resort, such as emergency rooms.

Federal action is also needed, including ending unjust exclusions from
federal safety net and financial assistance programs and providing an
accessible path to citizenship for those who have been living,
working, and contributing to their communities. Granting legal status
to these individuals would provide them with greater economic security
and stability, and allow them to make even more meaningful
contributions to the state.

Furthermore, by allowing all workers to pursue legal employment,
granting legal status could increase the state and local tax
contributions of Californians currently lacking documentation from
$8.5 billion to $10.3 billion, according to ITEP estimates. This would
deepen their already significant contributions to California’s
economy and public support programs.

Regardless of the prospects for federal action, California leaders
have the tools to continue making the state’s services inclusive
of _all _its residents and ensuring that no one is left out of
critical safety net programs.

_[KAYLA KITSON [[link removed]],
Senior Policy Analyst, conducts research, authors publications, and
provides technical assistance related to state tax and revenue
policies. The primary goal of her work is to advance policies that
make the state’s tax system more fair and ensure that it raises
enough revenue to support the services Californians need to thrive._

_Before joining the Budget Center in 2018, Kayla worked on federal tax
policy issues in Washington, DC at Americans for Tax Fairness and the
Institute on Taxation and Economic Policy. Prior to getting into tax
policy work, she focused on affordable housing and homelessness at
organizations in Los Angeles County and the Bay Area. Kayla received a
master’s degree in public policy from the University of Maryland, a
master’s degree in social welfare from the University of California,
Los Angeles, and a bachelor’s degree in psychology from the
University of California, Berkeley.]_

* undocumented workers
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* undocumented
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* immigrant workers
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* California
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* Health & Safety
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* taxes
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* public services
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* public essential services
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* workers
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* revenue
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* tax revenue
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