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Can Undocumented Immigrants Open Bank Accounts And Pay Taxes? How And Why?

Bridge Team Member

Opponents of immigration reform often point to illegal immigrants having a negative impact on the U.S. economy as a factor for their stance. However, an exploration into the recent efforts of the Internal Revenue Service (IRS) in issuing illegal immigrants Individual Taxpayer Identification Numbers (ITINs) provides ammunition for the proponents of reform. In 2010 alone, the Institute of Taxation and Economic Policy reported that undocumented immigrants paid over $11 billion in taxes.


In the context of paying taxes and opening bank accounts, ITINs provide undocumented immigrants a substitute for a social security number. Effective January 1, 2013, the IRS has revised its procedure for the issuance of ITINs. The required documents for the issuance of an ITIN (form W-7) as provided on the IRS website include, original documentation such as passports and birth certificates, or certified copies of these documents by the issuing agency. Notarized or Apostilled copies of documentation will not be accepted. For general information on obtaining an ITIN, please see this site. An application for an ITIN can be found here.

Bank Accounts

The requirements for obtaining a bank account vary from bank to bank but several major banks, including Bank of America and Chase, are on board with an ITIN (along with additional identification) being sufficient to open a personal and/or business bank account. Please contact your local bank and ask them for the specific requirements necessary. The benefits of opening a bank account as an illegal immigrant are tenfold. Among many of the obvious advantages, such as being able to write checks and access online banking options, undocumented immigrants with a bank account may also get mortgages, establish credit, create a record of residency, and pay taxes. All of which would only help with achieving the ultimate goal of obtaining legal citizen status in the U.S.

Pay Taxes

As mentioned above, ITINs allow immigrants without social security numbers to file taxes. When filing taxes, an ITIN is used along with the social security number under which wages were reported earned. Individuals filing taxes with an ITIN may do so in writing or via e-filing. According to CEIBA, a Philadelphia based non-profit who assists immigrants with financial literacy issues and provides free tax preparation services, the US Citizenship and Immigration Services considers paying taxes good moral character. Further, the undocumented parents of U.S. born children are required to present tax returns as a proof of income when applying for financial aid for both educational and other government assistance. Similar to CEIBA, many non-profits in the country provide similar services, and do so free of charge. Please contact local non-profits organizations for assistance; a non-profit directory can be found here.

Should you have any questions about how this impacts your business or employees, please do not hesitate to reach out to us at support@bridge.legal.

Content in this publication is not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult a Bridge-affiliated partner attorney or another qualified legal professional.


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