Immigration, Taxes, and Social Security: The Hidden Engine Sustaining the System

When it comes to Social Security and immigration in the United States, misconceptions abound. Political and media narratives often portray immigrants as a “burden” on the system. Yet, legal, statistical, and economic evidence tells a very different story. Immigration not only strengthens the base of contributors but also helps extend the solvency of Social Security and Medicare trust funds.

For businesses, immigrant families, and professionals seeking clarity on this subject, understanding how the system works and the true impact of immigration can make the difference between acting confidently and falling into costly mistakes.

What Few Know About Immigration and Social Security

One of the most persistent myths is that the Social Security Number (SSN) is reserved exclusively for U.S. citizens. This is not true. The Social Security Administration (SSA) also issues numbers to certain noncitizens who have legal status and work authorization in the country. For example, international students with work permits (OPT or CPT), individuals with temporary work visas, and lawful permanent residents are eligible to apply.

However, having an SSN does not automatically grant employment authorization. Work authorization stems from immigration status, not from the number itself. An SSN is merely an identifier that allows the government to track income and tax contributions. Distinguishing between “having a number” and “having the right to work” is therefore essential.

Verification Processes: Stricter Than You Think

Another common misconception is that obtaining an SSN or accessing benefits is simple for immigrants. The reality is far different. The SSA relies on the Department of Homeland Security’s SAVE system to verify the authenticity of documents submitted by applicants.

Before approving a request, the SSA cross-checks the information with USCIS records to confirm whether the individual has a valid status and, if so, what type of work authorization they hold. This rigorous process prevents fraud and preserves the system’s integrity.

Even when an immigrant adjusts their status—for example, from student to lawful permanent resident—they must update their records with the SSA, presenting official evidence of the new status. Each update goes through the same verification process, ensuring employers have accurate data for tax and compliance purposes.

The Statistic That Changes the Debate

The numbers speak for themselves. According to the American Immigration Council, in 2022, undocumented immigrants contributed:

• $25.7 billion to Social Security taxes.
• $6.4 billion to Medicare contributions.
• $96.7 billion in total taxes (federal, state, and local).

What’s striking is that while immigrants contribute these enormous amounts, many—especially those who are undocumented—cannot access the benefits they help fund. Their net contribution to the system is overwhelmingly positive.

The SSA’s Office of the Chief Actuary has acknowledged in technical reports that immigration improves the actuarial position of the trust funds. By expanding the workforce, contributions increase without a proportional rise in benefits claimed.

The Demographic and Economic Perspective

The U.S. faces a serious demographic challenge: the population is aging, birth rates are declining, and the worker-to-retiree ratio is shrinking. According to the Congressional Budget Office (CBO), Social Security spending as a share of GDP will continue to grow due to these structural changes.

Here, immigration plays a pivotal role. More immigrants mean more young workers, more tax revenue, and greater sustainability for programs like Social Security and Medicare. Conversely, restrictive immigration policies risk accelerating the insolvency of trust funds, leaving lawmakers with difficult choices such as benefit cuts or tax increases.

The SSA Trustees’ Annual Report highlights this reality: small variations in immigration projections can significantly shift the year when the trust funds begin to face critical shortfalls.

Implications for Businesses and Immigrant Families

Beyond the macroeconomic perspective, this issue has very real consequences on daily life. For employers, it means ensuring every hire is supported by valid, up-to-date documentation, since failing to withhold Social Security taxes based on incorrect assumptions can result in steep penalties. Even if a worker is not eligible to receive benefits, FICA contributions must still be withheld and reported without exception. For immigrant families, it underscores the importance of understanding that contributing to the system does not necessarily translate into future eligibility for benefits, allowing them to plan their financial futures realistically. For those navigating immigration processes, every adjustment of status must be immediately updated with the SSA and aligned with employment records to ensure consistency across documentation and prevent administrative complications.

Strategic Keys for Solid Compliance

Successfully managing Social Security in the immigration context requires meticulous attention to detail. Keeping all documentation in order is essential, from work permits to visas and proof of legal status. Any change in immigration status must be promptly reported to the SSA so that personal records align with official databases. Payroll compliance is equally critical: FICA contributions must be withheld and reported even if the employee is ineligible for benefits. Staying informed about regulatory updates from USCIS and the SSA is also vital, as forms and processes change frequently and may cause unintentional mistakes if not carefully monitored. Finally, early legal guidance can make all the difference. Proactive advice helps prevent errors that might otherwise carry significant tax, employment, or immigration consequences.

And the Next Step with RelisLaw

The evidence is clear: immigration does not weaken Social Security—it sustains it. Immigrants contribute billions in taxes that finance the retirement of millions of Americans, all while undergoing strict verification processes that safeguard the system.

But for both employers and immigrant families to successfully navigate this landscape, it is essential to follow every step correctly: verifying work authorization, updating SSA records, and maintaining consistent documentation.

At RelisLaw, we understand that success depends on precision. We guide you at every stage with expert legal advice, practical checklists, and tailored strategies to keep your immigration and tax processes error-proof. The right guide makes the difference between a risky process and a pathway to success.