Reporting Unclaimed Property (Including Outstanding Checks)

Posted on Wednesday, June 13, 2018

Indiana unclaimed property laws were enacted to prevent holders of unclaimed property from keeping the unclaimed property and recognizing it as business income.  The law provides a central location where people can search for their unclaimed property and provides the state an opportunity to return the money to its rightful owner. 

Under Indiana law, businesses (including nonprofit organizations) are required to report and remit unclaimed property to the Indiana Attorney General’s Unclaimed Property Division whenever the property owner cannot be found.  Included in unclaimed property are uncashed checks.  It is not uncommon for nonprofit organizations to have old, outstanding checks on their bank reconciliations. 

When an organization has outstanding checks that have not cleared in a timely manner, it should first try to contact the payee.  The Indiana Code states that the organization is required to send written notice to the apparent holder (payee) for all properties of $50 or more.  This should be performed no more than 120 days and no less than 60 days prior to the filing of the unclaimed report to the state.   Property is reported to the state as unclaimed based on its dormancy or abandonment period.  States are generally known as 3, 5 or 7 year states.  Indiana is considered a 3 year state.  After property goes unclaimed for 3 years it is eligible for reporting.  There may be different reporting periods depending on the type of property.  For example, in Indiana payroll checks should be reported after 1 year of dormancy. 

Reports for unclaimed property should be submitted to the State of Indiana by November 1st each year.  Organizations should maintain records for unclaimed property for 10 years after filing the report.

To report unclaimed property, visit the Indiana Unclaimed website at https://indianaunclaimed.gov/attorneygeneral/ucp/reportingPage.html.

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

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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