California AB 56: EDD Rules, SSN Mail, and Identity Theft Help

California Assembly Bill 56 is a 2021–2022 law that overhauled how the Employment Development Department fights unemployment fraud. It created a dedicated EDD fraud unit, forced the department to meet federal digital identity verification standards, cracked down on EDD mailings that exposed claimants’ full Social Security numbers, and set up a direct channel for identity theft victims caught up in fake claims. The bill was a direct response to the pandemic-era collapse of EDD’s claim-handling systems and the massive fraud losses that followed.

What AB 56 Requires EDD to Do

EDD carries the primary burden under the law. The department had to designate a dedicated unit to coordinate all fraud prevention and detection work, and that unit’s duties must align with the Government Operations Agency’s fraud prevention framework. EDD must also report to the state legislature each year on its fraud deterrence and detection activities, including how effectively it cross-matches claims against records of incarcerated individuals.¹

The bill went further than fraud alone. It required EDD to decide which of its temporary pandemic-era automation measures should become permanent, to implement a formal policy for tracking why claimants call for help, to monitor its first-call resolution rate, and to update the public dashboards showing backlogged claims. EDD must also model workload projections that account for sudden spikes, a direct answer to the department’s inability to keep up during 2020 and 2021.²

The annual fraud reports can redact or generalize details about specific fraud methods so EDD does not tip off bad actors.²

Federal Identity Verification Standards

AB 56 added Unemployment Insurance Code Section 1326.8, which requires EDD to follow the federal National Institute of Standards and Technology Special Publication 800-63 standards for digital identity verification. The department must meet a recognized federal baseline for confirming that whoever is filing a claim is who they say they are, rather than relying on outdated or ad hoc methods.²

The law also directed EDD to work with its identity verification vendors, including ID.me, to figure out why some claimants cannot complete verification and to fix those problems. EDD must regularly monitor the rate of successful verifications and minimize the need for staff to intervene manually. This matters because during the pandemic, hundreds of thousands of legitimate claimants were stuck in limbo while the department tried to separate real applicants from fraudulent ones.

If you are verifying with ID.me today, you typically need a government-issued photo ID such as a driver’s license, state ID, or passport. A video call may require a second document, such as a Social Security card, birth certificate, utility bill, or bank statement. Each document has to meet specific requirements for names, dates, and identification numbers.

Separately, AB 56 required EDD to assess its system for cross-matching claims against information about incarcerated individuals. The department must evaluate how regularly it runs those cross-matches, how well they prevent fraud, and whether they are inadvertently blocking eligible claimants from receiving benefits.²

Social Security Numbers in EDD Mail

One of AB 56’s most concrete provisions targeted a basic problem. EDD had been mailing documents that contained claimants’ full Social Security numbers. California law already prohibited state agencies from doing this, but EDD had not fully complied. AB 56 strengthened enforcement by requiring any state agency that could not meet the prohibition to submit an annual corrective action plan listing the steps taken, the remaining volume of noncompliant mailings, and the expected date of full compliance.¹

The law added a real consequence. If EDD fails to stop mailing documents with full SSNs, the department must provide and pay for identity theft monitoring for every individual who received such a mailing. That financial exposure gave EDD a direct incentive to fix the legacy systems that had been generating SSN-bearing correspondence for years.²

Help for Identity Theft Victims

AB 56 required EDD to set up a dedicated email inbox and website resources specifically for identity theft victims who receive incorrect tax forms, so those people can reach the department and get a prompt resolution instead of being funneled through general customer service.¹

If you discover that someone filed a claim using your personal information, or you receive a Form 1099-G for benefits you never applied for, EDD offers three reporting channels:

Online: Visit AskEDD and select “Report Personal Fraud.”
Phone: Call the fraud hotline at 1-800-229-6297 for general fraud reports, or 1-866-401-2849 specifically for incorrect 1099-G forms. Lines are open Monday through Friday, 8 a.m. to 5 p.m.
Mail: Send fraud-related documents to EDD, PO Box 826880, MIC 43, Sacramento, CA 94280-0225. For EDD mail arriving in someone else’s name, write “Return to Sender” and give it back to your mail carrier.

Once EDD confirms fraud occurred, the department removes the fraudulent claim from your Social Security number and issues a corrected Form 1099-G if needed.³

Fixing Your Tax Return

The IRS advises that you should not report fraudulent unemployment income on your tax return, even if you have not yet received a corrected 1099-G. File with only the income you actually received. You do not need to wait for the state’s investigation to finish or for a corrected form to arrive. If you already filed and included the incorrect amount, the IRS says not to file an amended return right away; the state will issue a corrected 1099-G and update your tax record with the IRS on your behalf.⁴

You do not need to file IRS Form 14039 (Identity Theft Affidavit) for unemployment fraud unless the IRS specifically tells you to or your e-filed return is rejected because someone already filed using your Social Security number. The IRS also recommends enrolling in the Identity Protection PIN program, which assigns you a unique six-digit number that blocks anyone else from filing a federal return under your SSN.⁴

Checking Your Credit

Unemployment identity theft often signals broader identity compromise. The Department of Labor recommends checking your credit reports for unfamiliar accounts or inquiries through AnnualCreditReport.com and considering a credit freeze, which prevents new accounts from being opened in your name. If you find suspicious activity, report it to the FTC at IdentityTheft.gov.⁵

1
California State Senate. Senate Judiciary Committee Analysis – AB 56 (Salas)
2
California Legislative Information. AB-56 Benefits: Outgoing Mail: Claim Processing: Reporting
3
California Employment Development Department. Help Us Fight Fraud
4
Internal Revenue Service. Identity Theft and Unemployment Benefits
5
U.S. Department of Labor. Identity Theft and Unemployment Insurance