Preparing and filing unclaimed property can be a horrifying and
confusing task for some individuals. It requires attention to detail with
each jurisdiction’s dormancy calculation and reporting requirements. So,
is there an easy way to compile and submit all your unclaimed property to
only one state for the year? The answer is no.
There is much confusion around reciprocity and whether someone
should file reciprocally. Reciprocal filing is an agreement between
two states in which unclaimed property is collected by one state and exchanged
with the other state. Most states that accept reciprocal filing today,
limit it to “incidental property only” which is defined as a limit of 10
out-of-state records totaling $1,000 or less. Keep in mind that not all
states allow reciprocal filing.
There are also risks to consider when filing
reciprocally. The property to report must be reported according to the
dormancy periods determined by each state. For example, if you need to
report to a spring filing state, such as Florida, and you report reciprocally to
a fall state in the fall, the Florida report would be considered
late. States are increasing their efforts in charging late fees, interest
charges, and penalties for these records. This may also subject you to
future audits.
Therefore, we encourage businesses to shy away from reciprocal
filing. It seems like less work in the beginning; however, you can have
peace of mind knowing you filed accurately. UPEnterprise and other software programs make the process seamless and
will save you a considerable amount of time and money should you ever be
audited.
Author: Lindy McDaniel
Account Executive
Labels: UP Best Practices
