DACA-Eligible New Jerseyans Pay $66 Million a Year in Taxes

Their tax contributions would drop by 40 percent if DACA protections were rescinded.

Published on Apr 25, 2017 in Economic Justice

Their tax contributions would drop by 40 percent if DACA protections were rescinded

Slide1New Jersey’s young immigrants eligible for DACA (Deferred Action for Childhood Arrivals) contribute $66 million in state and local taxes each year, the seventh highest level of all the states. And those annual contributions would increase by $27 million – the sixth most of all states – under comprehensive immigration reform. Yet they would drop by $21 million if DACA protections were lost. These are the key Garden State findings in a new 50-state study released today by the Institute on Taxation and Economic Policy.

Once young immigrants are given a chance, they capitalize on the opportunity – and their tax payments are merely one indicator of these New Jerseyans’ contribution to the state. Providing them, and the rest of the undocumented community, a legal path to citizenship would only strengthen the state’s economy.

Among the ten states with the largest DACA-eligible populations, New Jersey has the lowest application rate – meaning that once the rate picks up, the tax contributions from these young immigrants would rise.

However, the Trump administration has sent mixed signals on whether it intends to honor the DACA executive order in the long term and stories have emerged about DACA recipients being detained and deported.

The report concludes: “If the Trump administration fails to protect this population from deportation, the nation risks forcing them back into the shadows and losing the economic and societal contributions these engaged young people are making in their communities.”

DACA recipients’ state and local tax contributions increase substantially in part because they can legally work and are required to file income taxes using the Social Security number granted by their DACA enrollment. The report notes that employment rates go up for young immigrants receiving DACA protection (from 51 percent to 87 percent), and they experience increased wages.

Since 2013, ITEP has produced regular analyses examining the state and local tax contributions of the nation’s estimated 11 million undocumented immigrants.