Each state keeps a database that lists people and companies that did not claim money that was legally due. If you need some cash, you and your company may want to check with state taxing authorities to claim money that the state may be holding for you. You can do it online.
The flip side to this statement is that companies must file reports that identify people and entities that are owed money or property and remit the items to the state taxing authority.
This article is about a boon and a "gotcha!" State taxing authorities may grant filing extensions. It is highly unlikely that unclaimed property requirements will not be enforced. It takes time to file these reports.
When your company writes a check to anyone, i.e. an employee, vendor etc., if the person doesn't cash it, you can take the money back into income. Right? WRONG!If a check is not negotiated, assuming the company owes the money, and a defined period has passed with no contact with the payee, the company may have a duty to report unclaimed property. 😱
That's right! Your state may require you:
- to reach out to the person (notice requirement).
- If contact is not made, you may be required to report the following:
- identity of the payee,
- the amount owed, and
- give the money to the state taxing authority.
Reports must be in the format required by the taxing jurisdiction. Unclaimed property does not have the same statute of limitations as other "tax" types.
Rules vary by state. The area is deadline driven.
BTW-- if you are in Texas, it's time to start thinking about how this will be addressed. See https://comptroller.texas.gov/programs/unclaimed/. Right now, there is no sign of a filing extension in Texas. Stay tuned....This may change.
On a personal note, a lot of people do not have huge sums of money held by the state but some people do. You may have forgotten about a deposit, lost a paycheck, etc. Check it out. In Texas, the website is https://claimittexas.org/.