Unclaimed Property Reporting: Your Responsibilities and What to Expect
Great news! You’ve convinced your company or organization that unclaimed property reporting is a crucial Best Practice to implement. But what comes next? Here’s a breakdown of your responsibilities as a holder and what you can expect from the states as far as unclaimed property reporting obligations are concerned.
Understanding Your Obligations
The first step is to gain a comprehensive understanding of your organization’s specific obligations under unclaimed property laws. These laws vary by state, but generally, holders are responsible for identifying unclaimed property within their possession. This can include dormant accounts (savings, checking, or security deposits), uncashed checks, customer overpayments, and even payroll mistakes.
Navigating State Reporting Requirements
Once you’ve identified unclaimed property, you’ll need to generate and submit reports to the appropriate states within the mandated timeframe. These reports must be formatted according to each state’s specific requirements, which can be a complex and ever-changing landscape. Staying up-to-date on these reporting requirements can be a significant challenge for holders.
Due Diligence and Remittance
In most states, holders are obligated to perform due diligence by sending out search letters to the last known addresses of the rightful owners. The goal of these letters is to make a good faith effort to locate the owners before reporting the property as unclaimed. With some exceptions, a remittance check for the unclaimed property must also be submitted along with the state report.
Maintaining Records and Safeguarding Funds
Holders have a responsibility to maintain detailed records and documentation related to all reported unclaimed property. This includes copies of the reports themselves, supporting documentation for the property, and any due diligence efforts undertaken. Finally, holders have a duty to safeguard all unclaimed funds until they are reported and remitted to the appropriate state.
What to Expect from the States
Once you’ve fulfilled your reporting obligations and complied with state requirements, you can expect a release of liability from the state. This means you’re no longer responsible for the unclaimed property. The state will take ownership of the funds, acting as a custodian to secure and protect them until the rightful owner comes forward to claim them. States will make good faith efforts to locate the owners and distribute the unclaimed property to those who can demonstrate ownership.
Get Expert Help
Unclaimed property reporting obligations can be a complex and nuanced area. PEACC’s team of professionals can help you navigate the intricacies of state regulations and ensure your organization remains compliant. For more information or to discuss your specific needs, contact PEACC.com at 410.303.5510 or info@peacc.com.
By taking a proactive approach to unclaimed property compliance, you can protect your organization from potential penalties and audits, while ensuring that unclaimed funds are ultimately returned to their rightful owners.