Do i have to report unclaimed property? 2025

Unclaimed property refers to financial assets or accounts that have been left inactive or unclaimed by their rightful owner for a specific period.

As a business or entity holding such property, it is essential to understand your legal obligations regarding reporting and remitting these assets to the state. This article will discuss who must report unclaimed property, the reporting requirements, and the penalties for non-compliance.

Who Must Report Unclaimed Property?

Under the Uniform Unclaimed Property Act, any person or entity in possession of property that belongs to another, or who is a trustee in the case of a trust, or who is indebted to another person on an obligation subject to the Act, is considered a holder of unclaimed property. This includes:

Businesses and financial institutions
Trustees and fiduciaries
Government entities
Non-profit organizations

All holders, whether located in New Mexico or other states, must report to the State of New Mexico any unclaimed property they hold that is owed to New Mexico residents. New Mexico domiciled holders must also report all property where the owner’s name and address is unknown. Business entities are responsible for filing reports on behalf of their branches, divisions, or other affiliates.

Types of Unclaimed Property

Unclaimed property can take various forms, including but not limited to:

Bank accounts and contents of safe deposit boxes
Dividends, payroll or cashier’s checks
Stocks, bonds, and mutual fund accounts
Mineral interest or royalty payments
Court deposits, trust funds, escrow accounts
Inactive savings accounts
Life insurance proceeds
Customer overpayments
Unused gift certificates

These assets must be reported and remitted to the state after the dormancy period has elapsed if the rightful owner cannot be located.

Reporting Requirements

Reporting unclaimed property involves several steps to ensure compliance with state laws:

1. Identify Unclaimed Property

The first step is to identify any unclaimed property in your possession. This includes reviewing your records to determine which assets have been inactive or unclaimed for the dormancy period specified by the state.

2. Notify the Owner

Before reporting unclaimed property to the state, you must attempt to contact the rightful owner. This process, known as due diligence, involves sending a notice to the owner’s last known address to inform them of the unclaimed property and provide instructions on how to claim it.

3. File a Report

If the owner does not respond within the specified time frame, you must file a report with the state’s unclaimed property office. The report should include detailed information about the unclaimed property and the efforts made to contact the owner.

4. Remit the Property

After filing the report, you must remit the unclaimed property to the state. This may involve transferring funds, delivering physical assets, or providing other forms of documentation as required by the state.

Negative Reporting

If you have no unclaimed property to report, you must file a Holder’s Negative Report (RPD-41205) by the specified deadline. This form indicates that you have conducted a review and found no unclaimed property in your possession.

Consequences of Failing to Report

Failure to report unclaimed property can result in significant penalties and interest charges. Under the Uniform Unclaimed Property Act, the penalties for non-compliance include:

Interest Charges: Interest on the property or its value from the date it should have been reported, paid, or delivered.
Penalties for Late Reporting: A civil penalty of $100 per day, up to a maximum of $5,000, for failing to report, pay, or deliver property within the prescribed time.
Willful Non-Compliance: A civil penalty of $250 per day, up to a maximum of $7,500, plus 25% of the property’s value for willful failure to comply.
Fraudulent Reporting: A civil penalty of $500 per day, up to a maximum of $12,500, plus 25% of the property’s value for fraudulent reporting.

Why Compliance is Important

Compliance with unclaimed property laws is crucial to avoid hefty fines and legal issues. States are increasing their enforcement efforts, and there is no statute of limitations for unclaimed property audits if all unclaimed property has not been turned over. Regularly reviewing your records and understanding your reporting obligations can help ensure compliance and prevent potential penalties.

Resources for Reporting Unclaimed Property

For more information on unclaimed property reporting requirements and state-specific regulations, visit the National Association of Unclaimed Property Administrators (NAUPA) website at https://unclaimed.org/. This resource provides links to each state’s unclaimed property office and reporting guidelines.

For more detailed information on unclaimed property and how to handle it, check out these helpful articles:

Reporting unclaimed property is a legal obligation for businesses and entities holding such assets. Understanding the requirements, conducting due diligence, and filing the necessary reports can help ensure compliance and avoid penalties. Regularly reviewing your records and staying informed about state regulations will help you manage unclaimed property effectively and responsibly.