Understanding Unclaimed Property in Washington State
As a small business owner in Washington State, you might be surprised to learn about unclaimed property and your related responsibilities. You may have received notices from the State of Washington regarding unclaimed property, highlighting the importance of understanding and complying with state regulations.
What is Unclaimed Property?
Unclaimed property refers to assets or funds that have been abandoned by their rightful owners for an extended period. This often occurs when the owner loses contact with the institution holding the property or simply forgets about it. In Washington State, unclaimed property is managed by the Department of Revenue, which holds the property in trust until it can be returned to its rightful owner.
Types of Unclaimed Property
Unclaimed property can take many forms, including:
- Bank accounts
- Stocks and bonds
- Utility deposits
- Uncashed checks, such as payroll checks or other payments
How Does the State Acquire Unclaimed Property?
Businesses operating in Washington have a legal obligation to remit unclaimed property to the Department of Revenue. The most common type of unclaimed property for small businesses is uncashed checks. Here's a brief overview of the timeline for unclaimed property:
- Uncashed payroll checks become unclaimed property after one year.
- Other uncashed checks become unclaimed property after three years.
Responsibilities of a Business Owner
As a business owner, it is crucial to stay informed and proactive about your unclaimed property responsibilities. Here are some key steps to ensure compliance:
- Maintain Accurate Records: Keep your bank reconciliations up-to-date and maintain a record of all outstanding checks and their issuance dates.
- Annual Reporting Period: For most businesses, the unclaimed property reporting period runs from July 1 to June 30 each year. Any property that becomes abandoned during this period must be reported and remitted to the State by October 31 each year.
- Contacting Property Owners:
- If the unclaimed property is valued at $75 or more, you must attempt to contact the owner. This should be done no sooner than 180 days and no later than 60 days before submitting your unclaimed property report.
- Use first-class mail for your contact attempts and keep track of any returned mail.
- If you receive a response, note the contact and remove the item from your unclaimed property report.
- Reissue any uncashed checks or return the property to the owner based on the information received. This restarts the unclaimed property clock.
- Reissuing Checks: Simply reissuing an uncashed check without any contact from the owner does not remove the item from your unclaimed property report.
Why It's Important to Stay Compliant
The process of remitting unclaimed property can be easily overlooked by small businesses. However, the Department of Revenue does send reminders and, in some cases, audit requests to ensure compliance. It's wise to stay ahead of this task to avoid any potential penalties.
Special Rules for Insurance Companies
Insurance companies should be aware that they have specific reporting rules to follow regarding unclaimed property.
Check for Your Own Unclaimed Property
It’s also worth taking a moment to search for your own unclaimed property on the Department of Revenue website at https://ucp.dor.wa.gov/.
For more information or assistance with reporting unclaimed property, visit our website at cnccpa.com or give us a call at (509) 663-1661, and we’ll begin helping you, your family or your business today.
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