Stop Unemployment Fraud Act

The bill amends the Social Security Act and the Internal Revenue Code to require states to verify the identity of unemployment compensation claimants using government-issued identification and supporting documents, with the Secretary of Labor to issue implementing regulations within 12 months. It requires states to use federal and state data-matching systems, including the National Directory of New Hires and Social Security death and incarceration records, to detect fraud and improper payments, and to take action to deny or recover improper payments. The bill also prohibits paying benefits before eligibility is determined, bars self-attestation alone from establishing eligibility, requires states to verify work search records, and permits states to use up to 5 percent of recovered overpayments for program administration; the Secretary may withhold 5 percent of certain federal funds from noncompliant states.