Indiana Unclaimed Property

Posted on Friday, June 08, 2012

What is Indiana unclaimed property?
Unclaimed property is a financial asset that has no activity by the owner for an extended period of time which includes unclaimed wages, commissions, bank accounts, dividends, insurance proceeds, customer deposits, credit balances, and safe deposit box contents.

Examples of property you may have are lost or forgotten checks.  There are many other examples which may not apply to your company such as insurance proceeds, utility refunds, and safe deposit box contents.
What is not unclaimed property?  Usually unclaimed items are not tangible unless the item will fit in a safe deposit box.  Therefore, real estate, vehicles, and furniture are not considered unclaimed property.

When is a company required to report unclaimed property?
The property must be considered legally unclaimed.  A company would make this determination based upon the type of asset and how long the holder has been unable to find the owner.
When the property has been deemed legally unclaimed, the holder is then required to report and turn over the property to the State of Indiana.
Here are a few items and the term when that item is considered dormant.
• Payroll, wages, and utilities are considered dormant after one year.
• Vendor checks, cashier checks, customer credit balances, and miscellaneous outstanding checks are just some of the items considered dormant after three years.
• Escrow funds, condemnation awards, and missing heirs funds are just some of the items considered dormant after five years.
• Money orders are considered dormant after seven years.
• Traveler’s checks are considered dormant after fifteen years.

The Indiana Unclaimed website has a more inclusive listing, www.IndianaUnclaimed.com

What must the holder do prior to remitting unclaimed property?
The holder must try to contact the owner of the property thought to be unclaimed.  The state suggests a due diligence letter be issued.  The due diligence letter notifies the owner of the potential unclaimed property that the holder has this property.  If the owner responds, the property is not unclaimed.  If the owner does not respond, the property is unclaimed and can be treated as such.  An example of the due diligence letter is attached for reference.  Due diligence must occur for property in excess of $50.  The letter must not be sent more than 120 days or less than 60 days before the annual report is filed.  For most holders, these letters should not be sent before July 4 or after September 1.

How does a company report unclaimed property?
Indiana requires the holder to register so any unclaimed property can be reported online.  The registration takes place at www.IndianaUnclaimed.com.  The state has a guide you can follow.
The report must be filed annually by November 1st for most companies.  However, life insurance companies must file annually by May 1st.

Can I file for an extension on reporting unclaimed property?
The state of Indiana does not have an automatic extension available.  If a holder does need an extension, the holder must request the extension in writing.  The request must be made no later than thirty days prior to the due date of the annual report.

What if you do not file unclaimed property but you should?
If the annual report is filed less than fifteen days late, the holder will be subject to a civil penalty of $100 per day until the annual report is filed.
After the annual report is fifteen days late, the holder will be subject to the greater of:
1) $100 each additional day, not to exceed $5,000 or
2) 10% of the value of the property identified, not to exceed $5,000
If the holder can show good cause for the failure to file, the Attorney General may waive the penalty in whole or in part.
A holder who willfully refuses, after written demand by the attorney general, to pay or deliver property to the Attorney General is subject to a Class B misdemeanor.

Where can I get additional information about unclaimed property?
www.IndianaUnclaimed.com
 

Posted in Tax And Accounting Topics For Business

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.

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