Unclaimed Property
Compliance

Unclaimed property refers to financial assets or obligations owed to individuals or entities that have gone without activity for a state-defined period (called a “dormancy period”). This can include uncashed checks, customer credits, payroll items, vendor payments, refunds, gift card balances, and other similar liabilities. States require these items to be reported and remitted so they can be reunited with their rightful owners.

Any business or organization that holds property owed to others — including corporations, financial institutions, retailers, nonprofits, partnerships, and more — may be considered a “holder” and required to report unclaimed property. Reporting obligations aren’t limited to one industry; most holders have some exposure.

Yes. Most states require all eligible holders that possess potentially unclaimed property to review records annually and either file a positive report (with property) or a negative/affirmation of no property in some states. Even if you think you don’t have unclaimed property, a formal review helps establish a compliant filing history and reduces audit risk.

Each state sets its own dormancy period — typically ranging from 1 to 5 years depending on property type (e.g., payroll vs. customer credits). You must review your records regularly to identify when property meets the dormancy requirement and becomes reportable.

In general, you must report unclaimed property to the state where the owner’s last known address is located. If there is no owner address, then reporting usually goes to your company’s state of incorporation. This is based on uniform priority rules followed nationwide.

Non-compliance can lead to significant penalties, interest on late remittances, and increased audit risk. Some states impose daily fines and interest that compounds over many years, and audits can span a decade or more of past periods. In extreme cases, states can pursue civil or criminal actions against the company.

Due diligence is the formal effort to contact owners before property becomes unclaimed and reportable. Many states mandate specific steps (mailings or outreach) when property exceeds a threshold before you report the property. Proper due diligence helps reduce owner complaints and state scrutiny.

Many states offer voluntary disclosure programs that encourage holders to self-report past years of unclaimed property. Participating companies often receive waivers or reductions of interest and penalties in exchange for coming forward before an audit begins. This is a structured way to get compliant with state requirements through a negotiated process. >>Learn more

States or their contracted auditors may review a company’s books for a “look-back” period (often 5–10 years plus dormancy) to determine if unreported property exists. Audits require extensive supporting records and documentation, and incomplete documentation can increase liability. Having organized, audit-ready reporting reduces the burden and cost of these reviews. >>Learn More

Manual tracking with spreadsheets or disconnected systems is error-prone and hard to scale — especially for multi-state enterprise environments with varying rules and deadlines. Specialized compliance software can centralize data, automatically apply state rules, generate due diligence outreach and deadlines, and produce audit-ready filings — reducing risk, resource strain, and compliance costs. >>Learn More