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Unclaimed Property

September 25, 2013

 

 

What Is Unclaimed Property?
 

Unclaimed property is defined as property that has been abandoned by the owner.  It can be intangible property such as bank accounts and security investments, but may also be tangible property such as items stored in a safe deposit box.  Businesses, other than banks, can have unclaimed property in the form of uncashed payroll or vendor checks, customer overpayments or security deposits. For accounts to be considered unclaimed, they need to have no activity generated or contact with the owner for one year or longer as determined individually by each state.  A company who holds unclaimed property must try to contact the owner with due diligence to return the property.

 

If the property cannot be returned to the owner by the holding company, it is required to be reported and remitted to the appropriate state for custodial purposes until claimed by the owner.   The state the property gets remitted to is determined based on the owner’s last known address. The state then holds the property with the purpose of returning it to the proper owner.  In the case of tangible property, many states put the property up for auction and then keep the acquired funds to return to the owner.  Currently billions of dollars are being held by state run unclaimed property programs, just waiting to be returned to the rightful owners.  There is no time limit within which to make a claim; typically even heirs can collect this property. 

Unified Unclaimed Property Act

 

Although each state has its own unclaimed property program, most have enacted a version of the Unified Unclaimed Property Act (UUPA). This program was enacted by the federal government to create uniformity over the handling of unclaimed property.

 

Searching For A Claim
 

If you believe you may have unclaimed property, you can search the specific state’s database.  There is typically no charge for searching for unclaimed property, nor is there usually a charge to claim property located through your search.  The website used to search for Unclaimed Property in Illinois is https://icash.illinois.gov/index.asp.  There is also a website that will search most states in the United States, http://www.missingmoney.com/.

 

Illinois
 

If upon searching the Illinois database, you discover you have unclaimed property, you may claim the property by submitting the I-Cash Claim Form which can be located online.  This form must be submitted with a clear copy of documentation of your social security number and proof of address listed on the account information. Also, if the claim is greater than $100, the form must be notarized.

 

Companies in Illinois should report and remit any Unclaimed Property annually, by either May 1 or November 1 of the current year, depending on the type of business reporting the property. Companies must file form UPD601 and, if there is property to report, form UPD602 each year for unclaimed property.

 

As previously stated, the abandonment periods in each state vary. In Illinois, wages and credit memos have an abandonment period of one year and vendor payments have a 5 year abandonment period, to name just a few.  The abandonment periods for various types of property in Illinois can be found at https://icash.illinois.gov/pdf/UPD601Revised-20130826.pdf on the last page of the instructions.   After the abandonment period, these funds are required to be sent to the state if you are unable to locate the owner of the property.

 

Tax Consequences Of Receiving Unclaimed Property And Avoiding Having Unclaimed Property

Unclaimed property can be avoided by updating your address when moving to a new location and by contacting the financial institution holding your property on a yearly basis.  It’s also a good idea to keep an inventory of your investment and bank accounts so that small accounts don’t get missed or forgotten.

 

The tax consequences of receiving unclaimed property can vary according to the circumstances surrounding the property. 

 

If you want additional information or assistance with unclaimed property, please do not hesitate to call your contact at ECS Financial Services, Inc. for assistance.  You may also visit http://www.unclaimed.org/ The National Association of Unclaimed Property Administrators website, or contact the respective state’s association.

 

For more information or assistance, please contact info@ecsfinancial.com.


2013 Tax Due Dates:

September 30th –

Monthly Illinois wage report for August due (employers with 100 or more employees)

October 15th –

Extended Individual income tax returns due               

October 31st –

3rd quarter 2013 employer payroll tax returns due

This email disclaimer is subject to IRS Circular 230 as mandated by federal law. Unless expressly stated otherwise above, nothing contained in, forwarded with, or attached to this email was intended or written by ECS Financial Services, Inc. to be used, and cannot be used, by any person for the purpose of (1) avoiding any penalties that may be imposed under the Internal Revenue Code, or (2) promoting, marketing or recommending any federal tax transaction or matter addressed herein.