What to Do If Someone Filed for Unemployment Using Your Identity

Unemployment identity fraud occurs when someone uses your personal information, typically your Social Security number, to file a fraudulent unemployment claim and collect benefits you never applied for. It is a form of identity theft that can affect your taxes, your credit, and your ability to file for legitimate benefits when you need them.

The Identity Theft Resource Center (ITRC) received fewer than 20 contacts about unemployment identity theft in all of 2019. At the peak of the pandemic-era fraud crisis in 2020 and 2021, that number surged to one to two calls or more per hour. While the volume has decreased since then, it has never returned to pre-pandemic levels and shows no signs of doing so. If you have received mail about an unemployment claim you did not file, or a tax form reflecting benefits you never received, you are not alone and you have a clear path forward.

This guide covers how to recognize the warning signs, exactly what steps to take, how to handle any tax complications, and how to protect yourself going forward.

How Does Unemployment Identity Fraud Happen?

In most cases, the personal information used to commit unemployment identity fraud was not stolen from the unemployment system itself. Criminals typically obtain Social Security numbers and other identifying information through data breaches at unrelated institutions: banks, insurance companies, healthcare providers, and major retailers. The fraud is generally not caused by anything the victim did.

The pandemic created conditions that made this type of fraud far easier to commit. Enhanced federal benefits dramatically increased the value of each fraudulent claim. Many state unemployment systems were overwhelmed with legitimate filings, and identity verification standards were, in some cases, weakened to speed processing. 

Organized fraud rings took advantage of these conditions at scale. The U.S. Department of Labor’s Office of Inspector General estimated that more than $63 billion was paid out improperly through fraud or errors since March 2020.

Fraud rings often specifically target employed people. Because an active unemployment claim would prevent a second claim from being filed for the same person, employed individuals who are unlikely to check for unemployment activity are a more attractive target.

There is also a distinct form of unemployment fraud known as claim hijacking or account takeover. This occurs when a criminal gains unauthorized access to a legitimate, active unemployment account and changes the banking or address information to redirect benefit payments to themselves. 

If you are currently receiving unemployment benefits and your payments stop unexpectedly, particularly if your account information appears to have changed without your authorization, this may be the cause.

Signs You May Be a Victim of Unemployment Identity Fraud

Many victims do not know a fraudulent claim has been filed until they receive something in the mail, often during tax season. Here are the most common warning signs:

• You receive a 1099-G tax form for unemployment benefits you did not collect. Box 1 of the form will show an unemployment compensation amount. The form may be from a state where you have never lived or worked.
• You receive a letter, debit card, or payment from a state unemployment agency and you never filed a claim. The correspondence may come from any state, not necessarily the one where you currently live.
• Your employer notifies you that they received a request for information about an unemployment claim filed in your name while you are still actively employed.
• Your existing unemployment payments stop unexpectedly and you notice that your bank account or address on file with the state has changed without your knowledge. This is the hallmark of claim hijacking.
• You receive a request to verify your identity for unemployment benefits you never applied for.
• You receive IRS correspondence referencing unemployment income that does not match what you reported or received.

If any of these apply to you, act quickly. The sooner you report the fraud, the sooner the state can stop the claim and issue corrected tax documents.

What to Do If Someone Filed for Unemployment in Your Name

Step 1: Report the Fraud to the State Where It Occurred

File a report with the unemployment agency in the state that issued the fraudulent claim. This is true even if you have never lived in that state. You can find the correct contact for every state using the U.S. Department of Labor’s State Directory for Reporting Unemployment Identity Fraud.

If you are not sure which state is involved, check your 1099-G form or any correspondence you received. The issuing state will be identified on the form or letterhead.

You may not receive immediate confirmation after you submit your report, but filing creates the official record that triggers an investigation. It is also what prompts the state to issue you a corrected 1099-G and update your tax record with the IRS.

Step 2: Report to the Federal Trade Commission

Visit IdentityTheft.gov to file a report with the Federal Trade Commission (FTC). The site will walk you through the process, and pre-fill letters and forms with your information. This report also serves as official documentation if you need to dispute further fraudulent activity on your credit report or with other agencies.

Step 3: Handle Your Taxes Correctly

Do not report fraudulent unemployment income on your tax return. You are only responsible for income you actually received.

Do not wait for a corrected 1099-G before filing your taxes. File on time and report only the income you actually received. The IRS is aware that unemployment identity fraud affects tax filings and has guidance in place for this situation. Once your fraud report is verified, the state will correct the 1099-G and update the IRS record on your behalf.

You will also want to file Form 14039 with the IRS to show that you were the victim of identity theft. It is also important that you notify your state tax agency to alert them of this as well. 

Consider enrolling in the IRS Identity Protection PIN (IP PIN) program. An IP PIN is a six-digit number that prevents anyone else from filing a federal tax return using your Social Security number. Enrollment is free and voluntary, and it is particularly valuable for anyone who has experienced identity theft.

Step 4: Place a Fraud Alert or Credit Freeze

Contact one of the three major credit bureaus, Equifax, Experian, or TransUnion, to place a free fraud alert on your credit file. That bureau is required to notify the other two. A fraud alert signals to lenders that they should take extra steps to verify your identity before extending new credit.

A credit freeze is a stronger option. It prevents new credit accounts from being opened in your name entirely. Freezes are free at all three bureaus and can be lifted or removed at any time if you need to apply for credit.

Request your free credit reports at AnnualCreditReport.com to check for any other accounts or activity you do not recognize. Unemployment identity fraud can be a precursor to additional identity theft, so reviewing your credit now is a worthwhile precaution.

Step 5: Notify Your Employer

Let your HR department or manager know what has happened. Your employer may have already received a notice from the state unemployment agency requesting information about a claim filed in your name, and they will need to respond correctly by indicating that you are still employed and did not file the claim.

Your employer is not responsible for benefits paid on a fraudulent claim in your name. States do not charge employers for fraudulent claims once they are identified as such.

Step 6: Contact the ITRC for Free Support

The ITRC provides free, one-on-one support to identity theft victims at every stage of recovery. Our advisors can help you build a custom remediation plan, walk through the reporting steps with you, and connect you with additional resources specific to your situation.

You can reach us by phone at 888.400.5530 or through our live chat. There is no cost, and no situation is too complicated to bring to us.

How to Protect Yourself After Unemployment Identity Fraud

Once you have taken the immediate reporting steps, there are additional measures worth putting in place to protect yourself going forward.

• Keep all mail and tax documents related to the fraud. You may need them as supporting documentation during the investigation or for future disputes.
• Monitor your credit regularly. AnnualCreditReport.com provides free access to your reports from all three major bureaus. Reviewing your reports every few months allows you to catch any new fraudulent accounts or activity quickly.
• Use strong, unique passwords for any government benefit accounts, including your state unemployment portal, your Social Security online account, and your IRS account. Where available, enable multi-factor authentication and passkeys.
• Be alert to secondary scams. If you receive a call or text message claiming to be from a state agency and asking you to transfer funds, provide personal information, or call a different number, treat it with caution. Legitimate agencies will not ask you to transfer money to resolve a fraud issue.

If you are currently receiving unemployment benefits and your payments stop unexpectedly, do not assume it is a technical issue. Contact your state agency directly to check whether your account information has been changed without your authorization.

You Do Not Have to Navigate This Alone

Unemployment identity fraud is not your fault. The personal information used to file these claims was almost always stolen through a data breach at an institution completely unrelated to the unemployment system.

What matters now is acting quickly: reporting to the state, protecting your credit, and handling your taxes correctly. If any part of this process feels overwhelming, the ITRC is here to help. Our advisors provide free, personalized support.

Frequently Asked Questions About Unemployment Identity Fraud

Will I have to pay back the fraudulent unemployment benefits?

No. You are not responsible for repaying benefits that were fraudulently collected using your identity. Your employer is also not charged for fraudulent claims once the state determines they were filed by an imposter.

Can I still file for unemployment benefits if someone already filed a claim in my name?

Yes. Reporting the fraud does not affect your right to file a legitimate claim. Contact your state unemployment agency to report the fraud and then file your own claim separately. The state will have a process for handling this situation.

What if the fraudulent claim was filed in a state where I have never lived?

You still need to report it to that state. Fraud rings frequently file claims across multiple states simultaneously using the same stolen identity. Use the U.S. Department of Labor’s State Directory for Reporting Unemployment Identity Theft to find the correct contact for any state involved.

How long does it take to resolve unemployment identity fraud?

Resolution timelines vary by state and by the complexity of the case. Some situations are resolved within weeks. Others, particularly those connected to larger organized fraud rings, may take several months. Filing your report promptly and following up with the state helps move the process forward. The ITRC can assist you in tracking and managing the steps throughout.

Is unemployment identity fraud the same as regular identity theft?

It is a specific form of identity theft in which your personal information is used to apply for government unemployment benefits. Like other forms of identity theft, it can trigger downstream consequences including credit damage, tax complications, and additional fraud. It warrants the same urgency and the same reporting steps.

What is claim hijacking?

Claim hijacking, also called account takeover, occurs when a criminal gains unauthorized access to an existing unemployment account and changes the banking or address information to redirect benefit payments to themselves. If you are currently receiving unemployment and your payments stop without explanation, log into your account and verify that your information has not been changed. If it has, contact your state agency immediately.