I recently had a client contact me about a check that had been issued to a participant in their retirement plan which had not been cashed – “My investment company said that I needed to file some report regarding this check, can you help me?”
I wrote a post a few years ago on the subject of the State of Michigan’s Unclaimed Property Reporting that discussed the filing requirements. While many of our clients are now reporting, I’m sure that this is still a law that many overlook. Given the recent notice sent out be the State of Michigan, I thought I would post an update:
Beginning in 2011, changes to the Uniform Unclaimed Property Act, mandate a new due date to file the unclaimed property holder report as well as a shortened dormancy period for most property types. Every business or government entity incorporated in Michigan must report to the Michigan Department of Treasury abandoned property belonging to owners where there is no known address.
Medical and Dental practices will have unclaimed property from time to time resulting from normal business operations. The retirement plan distribution check noted above is just one example. Others would include – uncashed payroll checks, payments to vendors, and patient refund checks. Based upon the dormancy period, the business would have the obligation to report and submit this payment to the State of Michigan assuming the original owner could not be found. Taking the effort to find the person and contacting them regarding their outstanding matter seems to be the best “first step”, in my opinion. However, if you can’t find the person, then you need to file with the Michigan Department of Treasury. They have recently changed the compliance rules and here is what you need to know:
- New date for reporting Unclaimed Property is July 1.
- Dormancy periods for most property types have been shortened to three years (payroll items are one year).
- A 25% penalty may be levied for those failing to comply, in addition to being responsible for interest charged on the amount you were holding.
- Those voluntarily reporting the preceding four years are exempt from the penalty
To obtain additional information on filing requirements, forms, or to utilize available software go to this link – www.michigan.gov/unclaimedproperty