Every state except Mississippi requires holders to maintain unclaimed property records for up to 10 years after filing. Most states’ unclaimed property record retention periods exceed the more familiar standard tax laws. Some states do not have specific requirements regarding times and types of property to be retained, while others are very specific. Many of them have different time frames for specific property types like, money orders and travelers checks.
It can be burdensome, confusing and time consuming to create and maintain unclaimed property retention procedures and schedules. However, it is important to do so to avoid fines and/or penalties that may be imposed if audited.
Below are some general tips to include in unclaimed property procedures specific to retention of records:
- List all state(s) of incorporation for each operating entity.
- List all states where reports are filed.
- Types of property filed (e.g., Payroll, Accounts Payable, Accounts Receivable, Gift Cards, etc.).
- Review the statutes regarding retention for your state of incorporation and compare them to the other states that you’re filing to.
- Review the dormancy periods for the types of property you are reporting annually.
- Retention varies with each state, therefore, make note of the longest period required for retention obligations. This can be used as a guideline for all for all your unclaimed property record retention instead of attempting to manage each jurisdiction individually.
- Keep documents that verify any reversals, accounting and data errors/corrections, proof of timely reporting, evidence of due diligence including certified mailings and due diligence responses and last date of contact with owner.
- Review your policy annually to ensure it is still accurate and applicable to each operating entity.
Need assistance in creating a retention policy? Contact the experts at UPCR. We have all the information for each state. Avoid potential costly audit findings – consult us today for a free quote.