Unclaimed Property: Your Business Compliance and Reporting Requirements
As states become more aggressive in the pursuit of taxpayer compliance and collection of unclaimed, or escheat property, holders of unclaimed property need to monitor compliance on a continuous basis. Most state unclaimed property laws entitle state jurisdictions to calculate an estimate of unclaimed property liability in the event a holder of unclaimed property fails to file a report and remit any unclaimed property to the state.
Generally, property becomes unclaimed or escheat property at the end of a “dormancy period”. Property remains dormant for a period of time; the length depending on the state jurisdiction and the type of property such as uncashed payroll checks, outstanding accounts payable checks and credit balances. At the end of this dormancy period, the property becomes unclaimed or escheat property and is required to be reported and remitted to the state jurisdiction in which the unclaimed property resides. Each state determines its own dormancy periods, due diligence procedures, filing dates, report format and report filing; including whether the filing must be done via paper or by electronic means. In most states, at the conclusion of the dormancy period, the holder of unclaimed property must exercise “reasonable due diligence” and attempt to return the property to its rightful owner. Holders may be unsuccessful in returning property to its rightful owner for various reasons including, but not limited to, the inability to locate the owner of the property. In these instances, the property becomes reportable and remittable to the state jurisdiction.
Most, if not all, states will accept, under a voluntary compliance program, the filing of unclaimed property reports and remittance of unclaimed property for holders of unclaimed property that have not been compliant.
Reporting years and due dates for purposes of filing unclaimed property reports and remitting unclaimed property vary depending upon the state. The majority of state jurisdictions utilize a fiscal year end of June 30th for unclaimed property reporting purposes, regardless of a business’ tax filing year end. Currently, state law requires, in many instances, that online reports and negative reports be prepared and filed whether or not there is any unclaimed property to remit. The following chart lists the year-end date utilized by certain states and the due date of unclaimed property report filings and remittances:
| State | Unclaimed Property Year-End | Report/Remittance Due Date |
| Connecticut | December 31 | March 31 |
| New Jersey | June 30 | November 1 |
| New York | December 31 | March 10 |
| Pennsylvania | December 31 | April 15 |
| Rhode Island | June 30 | November 1 |
WithumSmith+Brown, PC professionals have significant experience in assisting holders of unclaimed property with unclaimed property reporting and compliance; including the preparation and submission of unclaimed property reporting packages under various states’ voluntary compliance programs. Please contact a member of Withum’s Healthcare Services Group at [email protected] for further questions or assistance.
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Please contact a member of Withum’s Healthcare Services Group at [email protected] for further questions or assistance.
The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your individual facts and circumstances.
