What is Unclaimed Property?
Unclaimed Property is any item that an organization issues to a person or business that goes uncashed or uncollected for a period of time. It is "owned" by the party whose name it is in, not the organization that issued it. After a period of time, states require organizations to turn the unclaimed item over to them to hold until the owner comes forth and claims it, which, for a number of reasons, often results in the states holding the item in perpetuity.
The most common sources of unclaimed property are accounts receivable credit balances and accounts payable uncashed checks, such as vendor payments, security deposits, and payroll.
Answers to common questions we receive:
Can I write off small amounts? No. While a couple of states exempt some items under a certain dollar amount, most do not. However, these items can usually be reported in aggregate, rather than with line item details.
What if I outsource a function? If you outsource a function, such as payroll or accounts payable, you must ensure uncashed and uncollected amounts are still being reported to the states, either by the vendor or by your organization. If the vendor does not do the reporting, then be sure you are receiving a list of the unclaimed items on a regular basis so that you can track, resolve, and report the items on a timely basis.
What if I have nothing to report? That depends. In some states, if you previously reported unclaimed property, you must file a negative report in years you have nothing to report.
Where must I file? An unclaimed property item (e.g., uncashed check) is reported to the state of the payee's last known address. This means that while you may only have one location, you may be filing in several states. If you do not know the payee's address, the item is reported to the state where your organization is incorporated (or formed).
When must I file? When an item is reported is dependent on four factors: what it is (e.g., payroll, A/P, etc.), the last activity date (e.g., check date, last written communication received by item "owner", etc.); the state of the owner's last known address; and a determination that it is not exempt. Each state has it's own rules for each of these variables
The most common sources of unclaimed property are accounts receivable credit balances and accounts payable uncashed checks, such as vendor payments, security deposits, and payroll.
Answers to common questions we receive:
Can I write off small amounts? No. While a couple of states exempt some items under a certain dollar amount, most do not. However, these items can usually be reported in aggregate, rather than with line item details.
What if I outsource a function? If you outsource a function, such as payroll or accounts payable, you must ensure uncashed and uncollected amounts are still being reported to the states, either by the vendor or by your organization. If the vendor does not do the reporting, then be sure you are receiving a list of the unclaimed items on a regular basis so that you can track, resolve, and report the items on a timely basis.
What if I have nothing to report? That depends. In some states, if you previously reported unclaimed property, you must file a negative report in years you have nothing to report.
Where must I file? An unclaimed property item (e.g., uncashed check) is reported to the state of the payee's last known address. This means that while you may only have one location, you may be filing in several states. If you do not know the payee's address, the item is reported to the state where your organization is incorporated (or formed).
When must I file? When an item is reported is dependent on four factors: what it is (e.g., payroll, A/P, etc.), the last activity date (e.g., check date, last written communication received by item "owner", etc.); the state of the owner's last known address; and a determination that it is not exempt. Each state has it's own rules for each of these variables