News > Immigration In Minnesota

Paying Taxes But Shut Out of Relief: Undocumented Workers in the COVID-19 Crisis

Posted on May 14 2020

“We are a mixed status family,” Perla wrote from St. Cloud. “My husband has a work permit and I do not. We have 3 children—our kids are 2, 17, and 21 years old. Our eldest is a DACA recipient and the other two are citizens. We did not receive any of the federal stimulus and need support. We are proud to work hard and to have been paying taxes since we arrived in 2001.”

Perla and Adrian live in Stearns County, a Minnesota hot spot for the COVID-19 virus. Adrian works in a poultry plant. Perla worked cleaning houses until the pandemic. She is not considered an essential worker so her family lost her income.

Though she is now unemployed, she is not eligible for unemployment compensation. Her family is not eligible for federal stimulus funds. She sent written testimony to the Minnesota legislative committee considering an emergency relief bill.

“Rent is $1000 per month, $600 for bills (electricity, water, etc.), and $800 for food. Since we do not qualify for other assistance we are struggling as a family and are getting behind on our bills. Just in terms of food – we have to eat less because we are anxious we might not have enough to keep a roof over our heads. There is no stability. What will we do if we fall behind?

“My kids are really affected by this. We usually do not have internet, but have had to add it now because schools are closed and our 17 year old is doing distance learning. We signed up for a program where we get 2 months free for now, but when that runs out soon, we cannot afford to pay for it. So then our 17 year old will not be able to do school anymore. We cannot go to the library for internet with a pandemic happening. She is supposed to graduate next June 2021 and it so important to be able to keep studying.

“As parents this makes us so sad. There is not enough money and there is no way to work. We are very limited in our options. We hope we can get some support from the MN state government – for us and families like ours. Our kids are not at fault for any of this, but they are paying the price.”

Undocumented workers pay billions in taxes every year, but are barred from unemployment benefits, Medicaid, MinnesotaCare, Supplemental Nutritional Assistance Program (SNAP),  Social Security, the federal stimulus program, and many more government programs.

Undocumented immigrants pay more than $10 billion in taxes every year, according to an analysis by the Institute for Taxation and Economic Policy. They pay many kinds of taxes:

• State and federal income taxes
• Social Security and Medicare taxes
• State sales taxes
• State property taxes
• Motor vehicle and gasoline taxes.

With unemployment reaching levels not seen since the Great Depression, unemployment benefits are a key safety net for many. Undocumented workers are barred from receiving either regular unemployment benefits or the expanded benefits provided by federal emergency legislation.

Unemployment insurance tax payments are made to Unemployment Insurance Trust Funds in each state through a tax paid by employers on behalf of employees. They also pay a smaller unemployment insurance tax to the federal government.

Over the past 10 years in Minnesota, about $11 million went to the federal unemployment insurance trust fund and $115 million to Minnesota’s trust fund based on the work of undocumented immigrants. Across the entire country, about $1.5 billion went to the federal unemployment insurance trust fund and $12 billion to state trust funds based on the work of undocumented immigrants.

Undocumented immigrants cannot receive Social Security. They still pay into the retirement trust fund. The Social Security Administration estimated that they “contributed roughly $12 billion to the cash flow of the program for 2010. We estimate that future years will experience a continuation of this positive impact on the trust funds.”

Undocumented immigrants are not eligible for Medicare. Nonetheless, their tax dollars support the Medicare Trust Fund . According to research published in the Journal of General Internal Medicine:

“From 2000 to 2011, unauthorized immigrants contributed $2.2 to $3.8 billion more than they withdrew annually (a total surplus of $35.1 billion). Had unauthorized immigrants neither contributed to nor withdrawn from the Trust Fund during those 11 years, it would become insolvent in 2029—1 year earlier than currently predicted.”

Undocumented immigrants pay even more in federal income taxes. Most use Individual Taxpayer Identification Numbers (ITINs) to file and pay, according to an analysis by Vox:

“The most recent IRS data, from 2015, shows that the agency received 4.4 million income tax returns from workers who don’t have Social Security numbers, which includes a large number of undocumented immigrants. That year, they paid $23.6 billion in income taxes. That doesn’t even include workers who paid taxes with fake Social Security numbers on their W-2 forms, which is also common.

“These undocumented workers pay taxes for benefits they can’t even use, like Social Security and Medicare. They also aren’t eligible for benefits like the earned income tax credit. But the IRS still expects unauthorized immigrants to file their taxes, and many of them do so.”

If you think workers like Perla and Adrian, who have lived here and paid taxes for 19 years, should get emergency relief, here’s what you can do:

• Call your Minnesota legislator and ask them to support SF 4540/HF 4611, a bill to establish an emergency community relief grant program to support Minnesotans who fall through the gaps of federal stimulus grants, unemployment insurance, and other relief programs.
• Call your Congressional representatives and ask them to support the HEROES Act and other legislation that will allow access to testing and health care for everyone in the country.