FAQs

Filing an unclaimed property report for the first time can feel daunting, especially if your company hasn’t done so before. But don’t worry! This FAQ aims to demystify the process and address your concerns about past due reports.

First Things First: What is an Unclaimed Property Report?

An unclaimed property report is a report submitted to your state’s unclaimed property office. It details any property held by your company that has been dormant or unclaimed for a certain period, as defined by state law. This property can include things like:

* Customer deposits and refunds: Unclaimed balances in checking, savings, or prepaid accounts.
* Gift certificates and loyalty points: Unused gift cards or reward points that haven’t been redeemed within the specified timeframe.
* Uncashed checks: Checks issued by your company that haven’t been cashed within a certain period.
* Dormancy fees: Fees accrued on inactive accounts.

So, you’ve never filed before. What now?

Many states offer leniency for first-time filers. This means you can report past due property without facing penalties or interest charges. However, the specific requirements and procedures vary by state.

Here’s what you need to do:

Identify your state’s unclaimed property office: Locate the official website or contact information for your state’s unclaimed property office. This will provide you with state-specific regulations and filing instructions.

Review the types of property reportable in your state: Each state has its own list of what constitutes unclaimed property. Carefully review the list to ensure you’re reporting everything that falls under their definition.

Determine the dormancy period: This is the timeframe after which unclaimed property becomes reportable. Each state has its own dormancy period for different types of property.

Gather necessary information: You’ll need to compile details about the unclaimed property, including owner information (if available), amount, and dormancy period.

Explore filing options: Some states offer online filing portals, while others require may still require paper forms. Choose the method that best suits your needs.

Consider seeking professional help: If you’re unsure about any aspect of the process, it’s wise to consult with an unclaimed property attorney or service provider. They can guide you through the complexities and ensure compliance with state regulations.

Key Points to Remember:

Voluntary Disclosure Agreements (VDAs): Some states offer VDA programs that allow you to report past due property without penalties in exchange for a one-time fee.

Penalties and interest: While many states offer leniency for first-timers, failing to comply with unclaimed property laws can result in significant penalties and interest charges.

No statute of limitations: Unlike other tax filings, there’s no time limit for reporting unclaimed property. States can audit your records back to the beginning of your business operations.

By taking proactive steps and understanding your state’s specific requirements, you can navigate the unclaimed property reporting process smoothly and avoid potential penalties. Remember, it’s always better to address the issue sooner rather than later.

Additional Resources:
* QRP State Profiles – National Association of Unclaimed Property Administrators (NAUPA)

This can happen, even after you’ve fulfilled your legal obligation to report and remit abandoned unclaimed property to the state.

Don’t worry! Even if you’ve already sent abandoned or unclaimed property to the state, the owner can still reclaim it. Each state has a holder reimbursement procedure in place to help you navigate this situation. Here is what you can do:

Refer them to the state:

• Explain that their property has been reported and transferred to the state’s unclaimed property division.
• Provide them with the state’s contact information or a link to their unclaimed property website. You can find this information by searching “[state name] unclaimed property” online.
• Be sure to retain documentation related to the property and your remittance to the state, as it will be necessary for the reimbursement process.

UPCR Can Help:

• Every state has a holder reimbursement procedure. UPCR can assist you navigate this situation.
• The National Association of Unclaimed Property Administrators (NAUPA) is also a great resource for for all-things unclaimed property!

At UPCR, we understand the complexities of unclaimed property compliance. Our mission is to empower organizations by providing comprehensive solutions that streamline their obligations. We leverage our over 25 years of experience and in-depth industry knowledge to ensure seamless property return to rightful owners, while delivering exceptional service and value to our clients.

By law, you have an obligation to make a reasonable effort to locate the rightful owners of unclaimed or abandoned property before it’s turned over to the state. This process is called due diligence.

Here’s a breakdown of your responsibilities:

• Identifying Dormant Property: Unclaimed property refers to money or assets that haven’t been accessed by the owner for a set period of inactivity, as defined by your state’s regulations. This can include dormant bank accounts, uncashed checks, unpaid customer refunds, or safe deposit box contents.
• Following Due Diligence Requirements: Each state has its own unclaimed property laws, which dictate the specific steps you need to take to find the owner. These requirements typically involve:
  • Timeframe: Determining the dormancy period after which property becomes unclaimed. This can range from one year to five years, depending on the type of property.
  • Notification: Making a good faith effort to contact the owner through a first-class mail notification sent to their last known address on record. Some states might require additional measures like public advertisement.
  • Record Keeping: Documenting your due diligence efforts for future reference.

It’s important to note that due diligence is an ongoing process. Even after reporting unclaimed property to the state, you may be required to respond to inquiries from the rightful owner if they surface later.

Due Diligence for Unclaimed or Abandoned Property Can Be Complex

While the concept of due diligence seems straightforward, complying with state-specific regulations can be quite intricate and time-consuming. Factors like:

• Multiple State Requirements: If your business operates across multiple states, you’ll need to navigate the unique unclaimed property laws of each jurisdiction.
• Varying Property Types: Different rules may apply to different types of unclaimed property, adding another layer of complexity.
• Evolving Regulations: Unclaimed property laws are constantly being updated, requiring you to stay informed about any changes.

Partnering for Compliance

Due to these complexities, many businesses choose to partner with specialized Unclaimed Property Compliance providers like UPCR. Through our partnership, we can help you with:

• Understanding State Regulations: Ensuring you’re following the correct due diligence procedures for each state you operate in.
• Streamlining the Process: Automating tasks like address research, notification generation, and recordkeeping.
• Reducing Risk of Non-Compliance: Mitigating the potential for penalties and reputational damage associated with non-compliance.

By working with our team at UPCR, you can ensure that you’re fulfilling your legal obligations while saving valuable time and resources.

There is no minimum reporting dollar threshold in any states’ unclaimed property law. Some states allow insignificant amounts (generally $50 or less) to be reported in “aggregate” to simplify reporting. Some states require holders to file a “negative report” if they have nothing to report for a specific year.

Most states have a fall reporting schedule (October 31/November 1 reporting deadline) for corporations while many states have a May 1 deadline for life insurance companies. There are about 9 states that have a March through May, June and July for spring filing dates. Many states allow reporting extensions for “good cause”.

Most states require online or electronic reporting/remittance, and reporting forms may be downloaded from their websites. Many Holders contract with professional service firms, such as UPCR, that will manage all or some of the reporting/due diligence processes on their behalf.

Every state, U.S. territory, and some Canadian provinces have unclaimed property laws and annual reporting requirements. Holders must report and remit property to the state of the owner’s last known address. For example, if a company located in Colorado has a customer’s address of record in New Mexico, the property must be reported to the state of New Mexico. Nexis is not a considering factor in Unclaimed Property law.

Who is required to report unclaimed property? Many entities are considered “holders” under unclaimed property laws and are required to report any dormant property they hold that belongs to someone else. Here’s a breakdown of the most common types of holders:

• Financial Institutions: This includes banks, credit unions, investment companies, trust companies, and more. They are responsible for reporting unclaimed funds in accounts, safe deposit boxes, and other financial instruments that haven’t shown activity for a set period (dormancy period).
• Business Associations: This category encompasses corporations, partnerships, LLCs, and other for-profit and non-profit entities. They may hold unclaimed property such as customer refunds, uncashed dividend checks, or loyalty program points with no activity for the dormancy period.
• Utilities: Public or private utility companies that provide services like electricity, water, gas, or telecommunications might hold unclaimed security deposits or customer refunds that haven’t been accessed for the dormancy period.
• Government Entities: State, local, and federal government agencies can also be holders. Examples include unclaimed tax refunds, payroll checks, or court-ordered distributions that haven’t been claimed within the dormancy period.
• Estates and Trusts: Executors or trustees may be responsible for reporting unclaimed property from estates or trusts, such as uncashed checks or unidentified beneficiaries’ shares that remain unclaimed for the dormancy period.
• Insurance Companies: This includes companies offering life insurance, property and casualty insurance, health insurance, etc. They are required to report unclaimed benefits or proceeds from policies, such as uncashed checks or lost policyholders.
• Retail Organizations: This includes stores, online retailers, and other businesses that sell goods and services directly to consumers. They may hold unclaimed property such as gift card balances, unclaimed merchandise credits, or customer refunds that haven’t been redeemed or claimed within the dormancy period.

It’s important to remember that this is not an exhaustive list, and specific requirements can vary by state. Many states have a threshold amount below which property need not be reported. Additionally, certain types of property, like gift certificates or wages, may be exempt from reporting requirements.

For further information on unclaimed property reporting in your specific state, you can refer to the following resources:

• National Association of Unclaimed Property Administrators (NAUPA): https://unclaimed.org/
• Unclaimed Property Division of your state’s Department of Revenue (search online using your state name + “unclaimed property”).

Well, let’s dive in. Unclaimed property, also known as abandoned property, refers to financial assets or intangible property that have been inactive for a specific period of time, and the owner cannot be located. This property is typically held by businesses or financial institutions on behalf of the rightful owner.

How Does Property Become Unclaimed?

There are several reasons property might become unclaimed. Here are some common scenarios:

• Change of Address: The owner moves and forgets to update their contact information with the holder of the property.
• Inactivity: The owner has a dormant account with no activity for an extended period.
• Uncashed Checks: A check is issued but never cashed by the recipient.
• Lost Owner: The owner may have passed away without a will or their whereabouts are unknown.

What Types of Property Can Be Unclaimed?

A wide variety of financial assets can be considered abandoned property. Here are some of the most common types:

• Checks: Uncashed wages, commissions, vendor payments, or refund checks.
• Deposits: Security deposits, utility deposits, or other refundable deposits.
• Financial Instruments: Stocks, bonds, dividends, or matured certificates of deposit.
• Insurance: Unclaimed life insurance benefits, annuities, or health insurance payouts.
• Other: Royalties, customer credits, unclaimed rebates, money orders, traveler’s checks, or even certain types of retirement accounts or employee benefits (depending on the state).

It’s important to note: Not all types of property are reported as unclaimed in every state. Some states may exclude gift cards or store credit. Always check your state’s specific regulations to see what types of property must be reported as unclaimed.

Dormancy Periods and State Regulations

The amount of time before property becomes unclaimed varies by state. In most cases, the dormancy period ranges from 3 to 5 years for most property types. However, some states have shorter dormancy periods, especially for unclaimed wages or salaries (often 1 year).

How to Claim Abandoned Property

If you think you might have abandoned property, you can easily search for it through the National Association of Unclaimed Property Administrators (NAUPA) website. NAUPA provides a central resource to search for abandoned property across all states. You can also visit your state’s unclaimed or abandoned property website directly.

By claiming your property, you can be reunited with funds that may be rightfully yours. Contact us to learn more about how we can help you navigate the complicated world of unclaimed property compliance.