Are You Properly Recording Your Unclaimed Funds

Oct 17, 2013

shutterstock_69907924All businesses that are located in and/or operate in the State of Ohio, or hold funds due to Ohio residents, are required to file an Annual Report of Unclaimed Funds. The only entities exempt from reporting are political subdivisions of the State, and Internal Revenue Code 501(c)(3) tax exempt hospitals.

Unclaimed funds are all intangible property, which is unclaimed by its owner(s) for a specific period of time, such as savings accounts, checking accounts, unclaimed wages, dividends, credit balances and many other types of outstanding checks and balances payable.

Some other types of accounts that are exempt from the unclaimed funds reporting in Ohio are: payroll checks less than $50.00, gift certificates, funds paid to or overpayments received from a company as the result of the receipt or issuance of an invoice. (business to business exemption applies here.) See the Annual Report of Unclaimed Funds Forms, Instructions and Information booklet for more information about accounts that are exempt from Ohio’s unclaimed funds reporting requirements. There is no minimum reportable dollar amount for unclaimed accounts, except for payroll checks less than $50.00.

Payments made as the result of a policy of insurance are not business to business exempt unless there is a contract between the insurance company & the service provider which makes them an in-network Provider. The contract creates a business relationship and therefore any credits due to and checks payable to the insurance company from the contract service provider are business to business exempt.

Failure to report unclaimed funds or for underreporting unclaimed funds, the company may incur civil penalties of $200.00 per day and/or a criminal penalty of up to $500.00 a day. The company may also have to pay interest at a rate up to 2% per month on the balance of unclaimed funds due.

We are seeing more and more unclaimed funds audits ~ are you in compliance?

By: Jenny Furey, CPA

Categories: Uncategorized