When are unclaimed property reports due? This is a fairly common question asked by holders that are new to the escheat reporting process, or not as well versed in the intricacies of escheatment reporting. Fortunately, Keane has provided answers to some of the most frequently asked escheat reporting questions to help your organization survive the upcoming fall reporting season.
Q: When are unclaimed property reports due?
A: Each state has its own deadline. The majority of states have a deadline that falls on either October 31st / November 1st—collectively known as the fall season. A smaller set of states has a spring reporting season, with reports due between March and May. Certain states go one step further by designating different due dates for specific property types. And as if that wasn’t confusing enough, California utilizes its own unique process that is entirely different than any other jurisdiction.
Q: Who must file unclaimed property reports?
A: The simple answer— any business, public or private, for-profit or non-profit, in possession of unclaimed property (assets left dormant and owed to another ). No matter the industry, any holder of abandoned assets has a responsibility for filing the required annual unclaimed property reports.
Q: What are common types of unclaimed property?
A: The property types associated with each industry vary, but there are some common types that are found in most organizations. These include payroll, accounts payable, accounts receivable credits, and other general ledger property types. In the financial services industry, there is a wide variety of property types, such as bank accounts, shares of stock, dividend checks, brokerage accounts, life insurance benefits, and other investment properties.
Q: Is there a reporting threshold for holders under a certain amount?
A: With the exception of a few states with conditional exemptions for amounts below certain thresholds, no. Within the complexities of unclaimed property, this could be the one topic most jurisdictions agree upon. There is generally no minimum amount in the law. In Lieu of a limited exemption, all unclaimed property must be reported to the state of the holders’ last known address.
Q: Can I report early?
A: Yes, to an extent. Some states have defining criteria that affect early reporting filing. For example, some require prior consent as well as a due-diligence effort to contact and make an attempt to locate owners. If no subsequent information on the owner’s whereabouts is collected, some states allow you submit their files early.
Q: Can I report late?
A: Yes, to an extent. Some states will grant you a reporting extension IF you request an extension prior to the reporting deadline. For example, in the state of Washington you can request a reporting extension prior to the November 1st deadline by faxing or emailing your request with the following information: Your Holder Numbers, how much additional time you need, and the reason for your extension.
Q: Are there fines for reporting property late?
A: All states have provisions allowing them to issue fines, penalties and/or interest on past due property. If you’re a holder of past due unclaimed property, you might want to consider requesting a voluntary disclosure agreement to mitigate your risk of penalties, interest or fines.
Q: How long should I retain my unclaimed property reports?
A: Keane’s National Consulting and Advisory Team recommends holding copies of your unclaimed property reports for a minimum of ten years after you file them. Ten years is the typical look-back period for states and third-party auditors to determine potential unclaimed property liabilities. If your organization happens to be faced with an unclaimed property audit in the future, there is no better defense than a complete and accurate reporting history with access to the last ten years’ worth of reports.
Q: How do I account for reporting properties in multiple states?
A: Depending on the quantity of dormant assets and values associated with them, some states permit you to report another state’s properties with your state of domicile unclaimed property reporting. This is known as reciprocal reporting, but it is generally not considered a practice on which to rely. In most instances, you are required, and as a best practice are recommended, to report individually to the each of the states to which you owe unclaimed property.
Q: Is there a unique way the state wants me to remit my payment?
A: Depending on the state where the property is due, holders of unclaimed property are generally required to submit reports and remit funds in a specified manner. Some states require holders to submit via electronic funds transfer. Other states may require ACH transfers or checks until funds reach a specified amount.
Q: Can I submit unclaimed property reports electronically?
A: Yes and no. There is no “one size fits all” when it comes to the submittal of unclaimed property reports. Each state has its own preference for holders. Some states require only traditional paper report filing while other states accept electronic filing (and some accept both).
If you still have additional unclaimed property reporting questions, we encourage you to contact one of Keane’s escheat reporting specialists for a complimentary consultation. Our proven processes, expertise, and technology provide a cost effective means of ensuring compliance with all state requirements.