This blog addresses money that business owners may owe PA (or another state) and money that may be owed to you. The first part of the blog is addressed to business owners, and the last paragraph discusses what will be of interest to individuals who may unknowningly have money owed to them and how to find it.
Pennsylvania is sending postcards to business owners reminding them that April 15 is the deadline for filing their unclaimed property tax report to PA.
The postcard reads “Companies, organizations, and public agencies in possession of unclaimed property for Pennsylvania residents are required by law to report and deliver property to the Pennsylvania State Treasury. Failure to do so can result in the initiation of an audit, penalties, or interest.”
What is abandoned property? Typically, this is where your business has remitted payment to another party and that party has not cashed your check. Examples of abandoned property are uncashed employee pay checks, vendor checks, and expired gift certificates.
The PA reporting form, AP-1, has a detailed listing of examples of abandoned property. Technically, the uncashed payments are still due the intended party. PA’s position is that the holder of the property must give the property to PA to hold (as the custodian) until such time that the property is claimed. Most unclaimed items are considered abandoned after five years. An exception is payroll checks, which are considered abandoned property after two years.
The PA postcard states that to learn more about PA’s unclaimed property law and how to file your annual report, please visit www.patreasury.org, call 1-800-379-3999, or write to firstname.lastname@example.org.
PA’s postcard also clearly states that writing off unclaimed property into income does not relieve you of your liability. As this is often a common business practice, PA is clearly making companies that this practice is not acceptable.
Generally when a taxpayer files a report, the statute of limitations begins to run. If you file an abandoned property tax report, and fail to include an item, PA’s position is that the statute did not begin to run with respect to the missing item because it was not included with the filing. Accordingly, if any item is omitted from an abandoned tax report, the statute of limitations never tolls.
If your company does not have abandoned property, you should visit the following two sites to see if you or your company may have abandoned property due you. PA’s website is http://www.patreasury.gov/unclaimed/search.html. You can also search for abandoned property due you in other states by visiting www.missingmoney.com.