What is unclaimed property? We’re glad you asked because most businesses are unaware of the unclaimed property reporting requirements. The Texas Comptroller defines unclaimed property as any financial asset or contents of a safe deposit box that have been abandoned by the property owner for one to 15 years. In Texas, you are considered a “holder” if you operate as a business or government entity and are in custody of assets belonging to another person or entity that have been abandoned for at least a year.
First, you must determine if the property is abandoned. The first step is to figure out if you have had communication or transacted business with the property owner during the abandonment period. There are different abandonment periods for different types of property. You can find a quick reference chart here.
An attempt must be made to return the property to the owner by sending a due diligence notice alerting them that their property will be reported if it goes unclaimed. If the owner does not claim the property, then you likely have a requirement to file a report and turn the property over to the State.
|March 1||Annual cutoff date for required abandonment periods|
|June 30||Annual cutoff date for life insurance|
|July 1||Deadline for holders to file a report and remit unclaimed property. Property may be remitted any time after the March annual cutoff date.|
|Nov 1||Deadline for filing life insurance reports and remitting property|
Almost all states have some type of unclaimed property laws. The abandonment periods, notification procedures and reporting requirements vary by state. If you are doing business in other states, be sure to check their state laws regarding unclaimed property.
Is it possible that you are the owner of property that hasn’t been claimed? It never hurts to check. Visit the Texas Unclaimed Property website to find out.
Ernesto Aguilar is a tax professional with ATKG. He holds a Bachelor of Business Administration from the University of the Incarnate Word and a Master of Business Administration from Texas A&M University-San Antonio. Contact your ATKG tax advisor at 210.733.6611 or firstname.lastname@example.org for assistance in easing the burden of unclaimed property reporting and due diligence.