Unclaimed property regulations can be a thorn in the side of any business. Keeping track of varying state laws and dormancy periods can feel like a full-time job. At UPCR, our goal is to equip you with the latest information on unclaimed property for businesses. In this blog post, we will be focusing on record retention strategies to ensure compliance and avoid penalties.
The challenge: state variations and record retention
Most states require businesses (aka holders) to maintain unclaimed property records for extended periods of time, often exceeding standard tax record retention requirements. These records are crucial for demonstrating compliance during audits.
Here’s where things get tricky:
- Each state has unique requirements: Retention periods and record types can differ significantly state by state. Some states are very detailed, specifying what documents to keep and for how long. Others offer more flexibility.
- Dormancy periods and property types can vary: A dormancy period is a timeframe for when unclaimed property becomes reportable to the state. Understanding dormancy periods for different property types (payroll, gift cards, etc.) can be complex and can also vary state by state.
How to avoid a recordkeeping headache
To avoid a recordkeeping headache, identify the state with the longest retention period and use that as your baseline for all records. This creates a single, standardized approach across all your operations, regardless of individual state requirements.
At UPCR, our compliance management and reporting technology, UPNavigator®, is always up to date with the latest state laws so that you can navigate the ever-changing state unclaimed property requirements with confidence and ease.
Building a bulletproof retention policy for unclaimed property
A strong record retention policy is your shield against compliance issues. Here’s what to include:
- Company footprint: List your state of incorporation and all states where you file unclaimed property reports.
- Property types reported: Identify the types of property you report (payroll, accounts payable, etc.).
- Recordkeeping best practices: Maintain documentation for:
- Reversals and data corrections
- Reporting timeliness
- Due diligence efforts (certified mailings, responses)
- Last owner contact dates
- Regular reviews: Schedule annual reviews to ensure your policy remains accurate and reflects any changes in your operations or state regulations.
Don’t be overwhelmed! We can help.
Developing and maintaining a compliant record retention policy can be time-consuming and complex. At UPCR, we specialize in unclaimed property for businesses and here are just a few ways that we can help:
- State-specific expertise: We help you stay on top of evolving regulations in each state you operate in through modern technology solutions and with a team of experts at your fingertips.
- Streamlined processes: We can help you develop a comprehensive yet efficient recordkeeping system.
- Reduced audit risk: By working together, your chances of costly audit findings and penalties are minimized.
By prioritizing unclaimed property record retention, you can achieve peace of mind and avoid unnecessary headaches. Proactive recordkeeping is the key to unclaimed property compliance for businesses. Schedule a no-cost consultation today and let’s see how we can work together!