Is Identity Theft a Felony or Misdemeanor?

Yes, in most cases. Under federal law and in most U.S. states, identity theft is classified as a felony, especially when it involves significant financial loss, multiple victims, or aggravating factors like terrorism or child victimization.

However, low-level or isolated incidents—such as a one-time unauthorized charge under $500—may be prosecuted as misdemeanors in some jurisdictions.

In 2021, identity theft victimized over 24 million Americans, and by 2024, synthetic fraud had caused a staggering 153% surge in financial losses. With criminals now leveraging AI and data breaches to commit large-scale fraud, the question of how identity theft is charged—felony or misdemeanor—has become crucial for both victims and the accused.

This guide breaks down how identity theft is prosecuted under federal law, state statutes, and even international systems like Canada’s, exploring mandatory minimums, felony thresholds, and real-world sentencing outcomes.

1. Federal Classification: Felony Default

Basic Identity Theft – 18 U.S.C. § 1028(a)(7)

This statute criminalizes the knowing transfer or use of another person’s identification without lawful authority.

• Penalty: Up to 15 years in prison, fines, and forfeiture
  
• No mandatory minimum sentence

Aggravated Identity Theft – 18 U.S.C. § 1028A

This more severe statute covers ID theft tied to crimes like tax fraud, immigration violations, and bank fraud.

• Mandatory minimum: 24 months, served consecutively to any other sentence
  
• Terrorism-related cases: Minimum rises to 5 years
  
• Cannot be reduced even with plea deals or sentencing guideline departures.

🔹 Expert Insight:
“Prosecutors use ‘aggregated loss’ theories to elevate small frauds into felonies—a $5,000 scheme affecting 50 victims becomes a $250,000 felony.”
— Shai Cohen, SVP at TransUnion

2. Federal Sentencing Guidelines vs. Statutory Minimums

While the U.S. Sentencing Guidelines (USSG) offer advisory ranges based on factors like:

• Number of victims
  
• Financial damage
  
• Defendant’s role

… they do not override statutory mandatory minimums, especially for aggravated identity theft.

3. When Federal Prosecutors Take Over

Federal jurisdiction is triggered when:

• Crimes cross state lines (e.g., phishing or multi-state fraud)
  
• Schemes target government systems like the IRS or Social Security
  
• Offenses involve organized rings or the dark web

4. State-Level Variations: Wobblers vs. Felonies

State | Misdemeanor Criteria | Felony Criteria

—|—|—
California | Loss under $950, first-time offenders (up to 1 year) | Over $950, prior convictions, or elderly/child victims (up to 3 years) – Cal. Penal Code § 530.5
Florida | Loss under $5,000 (no mandatory jail) | Over $50,000, or 20+ victims → up to 30 years – Fla. Stat. § 817.568
Texas | Minor cases (180 days jail) | Exploitation of public records or organized fraud → 2–20 years – Tex. Penal Code § 32.51
New York | Class D felony for first offenses (up to 7 years) | Enhanced penalties for repeat offenders or higher loss

5. Real-Life Examples

• Felony Case:
  A Virginia man received 12 years in federal prison for orchestrating a synthetic identity fraud ring using 400+ stolen identities.
  
• Misdemeanor Case:
  A waiter copied a customer’s credit card and made a single $400 charge. Prosecuted as a misdemeanor due to minimal loss and lack of aggravating factors.

Related article: Does Homeowners Insurance Cover Identity Theft?

6. Specialized Identity Theft Offenses

Tax Identity Theft – 26 U.S.C. § 7206

Filing a fraudulent tax return can result in:

• Up to 3 years in prison
  
• No mandatory minimum

Medical Identity Theft – 42 U.S.C. § 1320a-7b

• Up to 10 years for defrauding Medicare or Medicaid
  
• Enhanced state penalties may apply

Child Identity Theft

Many states impose:

• Harsher felony classifications
  
• Mandatory restitution, especially for minor victims

7. Juvenile Identity Theft Offenders

Juveniles are typically diverted from incarceration toward:

• Probation
  
• Counseling
  
• Community service

No mandatory minimums generally apply under juvenile codes.

8. Alternative Sentencing & Plea Agreements

Non-violent or first-time offenders may be eligible for:

• Diversion programs
  
• Community service
  
• Probation (especially in misdemeanors)

Plea Deals:

• Offenders may receive a 2-level sentence reduction for early acceptance of guilt (USSG § 3E1.1)
  
• But statutory floors remain, especially for aggravated identity theft

9. Collateral Consequences of Conviction

Even misdemeanor identity theft can carry long-term consequences:

• Employment: 87% of employers screen out applicants with ID theft records
  
• Credit Damage: Victims and perpetrators may face 100+ point drops in FICO scores, loan denials for 7+ years
  
• Immigration: Non-citizens may face deportation for felony convictions

10. Canadian Contrast: A Hybrid Legal Model

Section 402.2 of Canada’s Criminal Code classifies identity theft as:

• Summary conviction (misdemeanor-equivalent): Up to 2 years
  
• Indictable offense (felony-equivalent): Up to 5 years

Penalties depend on intent and link to crimes like forgery or fraud.

11. Reform & Policy Debates

Critics argue:

• Mandatory minimums for non-violent financial crimes can be disproportionate
  
• Proposals suggest raising loss thresholds or allowing judicial discretion for restitution-based alternatives

12. What To Do If Accused or Victimized

If Accused:

• Demand proof of intent
  
• Negotiate a plea to misdemeanor in exchange for restitution or cooperation

If Victimized:

• Freeze your credit with Equifax, Experian, and TransUnion
  
• File a report at IdentityTheft.gov for recovery planning

Conclusion: Felony Is the Norm, But Exceptions Exist

Key Takeaway: 95% of identity theft cases are prosecuted as felonies. But small-scale, non-repetitive incidents may qualify as misdemeanors, especially under state laws like California’s.

Understanding whether identity theft is charged as a felony or misdemeanor depends on multiple factors:

• Jurisdiction (federal vs. state)
  
• Loss amount
  
• Number of victims
  
• Victim type (e.g., minors, seniors)
  
• Criminal history
  
• Associated crimes

Whether you’re facing charges or recovering from fraud, awareness of these distinctions—and quick action—can make a major difference.