Most people are aware that they can do an online search to see if the state is holding any funds for them, but today I want to talk about how those funds get to the state and what you can do about unclaimed property.
For those who do not know, can you explain?
- In general, when a business owes a customer money/refund (non-cash) and that customer cannot be located, the business is required to submit those funds to the state.
- Anyone can then go to missingmoney.com or their state website to see if the state is holding any funds for them.
How does a business know if they need to send the funds to the state?
- They should do an annual review of the company books to see they have any property that are considered abandoned.
- Wages – 1 year
- Customer refunds or rebates – 5 years
- Dormant Account – 5 years
- Uncashed travelers checks – 15 years
- Generally does not include a credit given to a customer that must be used for services.
What does the business need to do?
- Once the property is identified, then business must make a good faith effort to try to locate the owner.
- Notification letter to last known address for any amount over $50.
- Letter must be kept on file for 5 years.
- If the person cannot be located, the funds are send to the state.
- Each state has a different procedure, so look at your state’s website for details.
Since we have a little more time, can we talk about how the person can get the money back?
- Missingmoney.com or the state’s website.
- I looked up John Smith in Wisconsin and there were over 200 entries, many over $100.
- Companies search these sites
- Contact people and say there is money that they found
- Finder’s fee
- If that happens, go to the missing money site and see if your name is on the list.
Be sure to talk to a tax professional if you have any questions about unclaimed property.
As a partner, I have thorough experience providing tax services to individuals, privately held businesses, nonprofit entities and estates and trusts. I also provide compilation and review services.
