All Washington businesses must file Washington Unclaimed Property Reports by October 31st.
I’ll walk you through who needs to file an unclaimed property report in Washington, what qualifies as unclaimed property in Washington, and how to file your report with the Washington Department of Revenue. I’ll cover the general reporting requirements for most businesses but be aware that there are differences for financial institutions, the insurance industry, and governments.
Washington State passed the Revised Uniform Unclaimed Property Act (RUUPA) was enacted on March 30, 2022 and is effective for reporting years beginning January 1, 2023. This article has been updated from it’s original posting in October 2021 to reflect changes made by the RUUPA.
All businesses that may hold unclaimed property of a Washington resident or business must report to the Washington Department of Revenue. In other words, If your business is registered in Washington, you are required to file a report annually, even if you don’t hold any unclaimed property.
Unclaimed property is money or other physical property owed to an individual. Property is considered unclaimed if it has been held for a period of time and good faith effort has been made to return it to the owner. The amount of time varies based on the property type, and you must meet specific requirements to meet the good faith requirement.
The Uniform Unclaimed Property Act of Washington identifies many assets that would qualify for unclaimed property reporting if abandoned by the owner. In general, unclaimed property is physical in nature and has monetary value.
Most businesses I work with only have unclaimed property if they write physical checks. In those cases, their unclaimed property is checks written to vendors or employees that were never cashed.
If my clients have accounts receivable, unclaimed property also includes any credit balances owed to customers.
The period of abandonment, or dormancy period, is the period of time that a property has been held and has not been claimed by the owner. Chapter 63.29 RCW defines the period of abandonment for various types of property. Below are some of the more common items held by businesses.
The period of abandonment usually starts with the last date of positive contact with the owner. So, for example, if you wrote a check to a vendor that was never cashed on May 1st, 2018, and received no response in your efforts to contact the vendor, the property would be considered abandoned and reportable in your 2021 unclaimed property report. However, if the same vendor responded to your contact in 2019 but failed to provide updated remittance information and you’ve been unable to contact them since, it would be reportable on your 2022 unclaimed property report.
Below are some tables you can use to make sure you report unclaimed property in the correct year.
3 year abandonment period | 1 year abandonment period | |||
Last Activity | Report By | Last Activity | Report By | |
07/01/2017 – 06/30/2018 | October 31, 2021 | 07/01/2019 – 06/30/2020 | October 31, 2021 | |
07/01/2018 – 06/30/2019 | October 31, 2022 | 07/01/2020 – 06/30/2021 | October 31, 2022 | |
07/01/2019 – 06/30/2020 | October 31, 2023 | 07/01/2021 – 06/30/2022 | October 31, 2023 | |
07/01/2020 – 06/30/2021 | October 31, 2024 | 07/01/2022 – 06/30/2023 | October 31, 2024 | |
07/01/2021 – 06/30/2022 | October 31, 2025 | 07/01/2023 – 06/30/2024 | October 31, 2025 | |
07/01/2022 – 06/30/2023 | October 31, 2026 | 07/01/2024 – 06/30/2025 | October 31, 2026 | |
I have also published these tables in Google Sheets.
You need to send a due diligence letter for all monetary amounts owed over $75. Due diligence letters must be sent between May 1st and August 1st of each year to the last address you have on file. I’ve created a template for due diligence letters based on information from the Washington Department of Revenue that you can download and use.
As of January 1, 2023, you must send letters by first class mail to the apparent owners of property totaling $75 or more. Additionally, you must send due diligence letters via email if the owner has consented to communication at an email address you have on file.
Like it or not, you’re legally required to report unclaimed property to the state and follow established procedures to turn over property to the unclaimed property program.
It’s also the right thing to do! If you have something that belongs to someone else, you have a duty to return it to the rightful owner.
I’ve never met a business owner that likes to turn over cash to the government. Unfortunately, just because someone doesn’t cash their check or claim a credit on their account doesn’t mean it’s free money for you.
If you don’t file annual unclaimed property reports, you will face a 10% penalty of all property due. You will be subject an additional 10% penalty if the unclaimed property is discovered as the result of an audit.
Reporting unclaimed property is relatively easy in Washington. Reporting is done online, and you have the option to upload a file, create a manual report, or file a negative report.
There are five steps to completing your unclaimed property report.
In April of each year, you need to review your business records for any unclaimed property that your business may be holding. For most businesses, this means:
[BONUS] I have created a handy log that you can use to track unclaimed property easily
As discussed above, you must make a good faith effort to notify the property owner that you are holding their property. Letters must be sent out between May 1st and August 1st each year. If your business writes a large volume of checks, I suggest reviewing outstanding checks written more than three months ago and following up more regularly.
If you have not been able to locate the owner, you will need to gather additional information such as an EIN or social security number, birth date, and property type defined by the State of Washington.
I advise my clients to collect a W-9 from all vendors before writing checks to ensure that information is tracked accurately for 1099 reporting. If you’ve done this, gathering the additional information needed should be easy.
Once you’ve carefully reviewed your records, attempted to contact property owners, and gathered all the required information, there are three ways to file an unclaimed property report in Washington.
If you only have a few items to report, you can create, file, and pay your report directly on the Washington DOR website. This method requires a lot of data entry, so I suggest using one of the more automated processes below if you have more than a handful of items to report.
The National Association of Unclaimed Property Administrators (NAUPA) has created a standard file format to make unclaimed property reporting more consistent across the country. There are free solutions, such as HRS Pro, that you can use to get your data into the NAUPA format for upload to the DOR website. Once your file is uploaded, you can submit your payment to the DOR.
You can file your report through another portal, like UPExchange, and then submit payment on the DOR website.
Your payment must be submitted on the DOR website. You can pay by ACH, credit/debit card, or wire transfer.
When you’re done filing, be sure to save a copy of your submitted unclaimed property report. Errors in the system are rare. However, if something does go wrong, it helps to have evidence that you filed timely.
If you have no unclaimed property to report, you need to submit a negative report. Follow the link to submit a negative report, complete your information, and select the yes button to file a negative report.
Typically no, you are required to wait the standard time for each property limit. However, if you believe your circumstances warrant early reporting, you will need to request approval from WAUCPHolders@dor.wa.gov.
Most likely, you will have to pay a 5 – 10% penalty depending on the circumstances.
Maybe. If you have unclaimed property belonging to a business or person from outside of Washington, you may be able to report it with your Washington. To qualify, you need to have ten or fewer out-of-state properties totaling $1,000 or less. If the properties exceed these amounts, you must report them directly to the other state(s).
California is a notable exception to this guideline. If your business owes property to anyone with a last known address in California, it must be reported directly to California. As a best practice, I suggest doing a quick search on unclaimed property reporting laws any time you have unclaimed property outside of Washington.
Still have more questions? The DOR has some great resources for businesses available or you can contact me for help.
If your records are in good order, filing a Washington Unclaimed Property Report should be easy. If you haven’t kept up with tracking outstanding checks, start by fully reconciling your balance sheet. Then go through your records to look for checks that haven’t been cashed yet. If this feels too overwhelming or you don’t have time to take care of it, let’s connect! I can make sure your business records are in order and your reports are filed on time.
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