Mark your calendar to comply with Ohio’s unclaimed property law
All states including Ohio have some type of unclaimed property law that declares money, property or other assets to be abandoned after a period of inactivity. Abandoned or unclaimed property, although not considered a tax, has become a significant source of revenue for many states. Additionally in this information age, states have become much more effective in locating businesses that have never filed an unclaimed property report, which can lead to an audit. All businesses that are located 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.
Assets in a dental practice that could be considered unclaimed funds may include payroll (wages, bonuses, commissions); expense reimbursement checks; insurance proceeds due an individual; credit refund checks; refund and rebate checks; customer deposits; and other intangible interests or benefits. There are three types of accounts that are exempt from the unclaimed funds reporting in Ohio. They are:
- Wages less than $50 issued on or after July 1, 2000.
- Gift Certificates
- Business to Business Transactions that are limited to funds paid or received as the result of the company’s receipt or issuance of an invoice.
Dental offices should be aware that, in Ohio, property is generally presumed abandoned if it remains unclaimed by the owner for three to five years and the practice cannot locate the owner. One exception is payroll checks, which can only be held for one year.
Reporting Unclaimed Property in Ohio
Ohio businesses have a number of responsibilities concerning unclaimed property. Initially, written notice must be sent to the apparent owner of the unclaimed property, if known. The state requires that an OUF-8 Notice of Unclaimed Funds form be sent to owners of dormant accounts with a balance of $50 or more before the funds are reported as unclaimed. If after the mailing the property still remains unclaimed, businesses must report the property to the Ohio Director of Commerce.
The reports are due before Nov. 1 for the year as of the preceding June 30th and are filed using an OUF-1 Unclaimed Funds Reporting form.
Most importantly, businesses are required to turn over any and all unclaimed property to the state. Stiff penalties apply to businesses who fail to comply with any of these requirements.
Filing a Negative (None) Report
Even if a practice’s records show that the company is not holding any unclaimed funds, or if all owners respond to the OUF-8 Notice of Unclaimed Funds mailing, a Negative (None) Report using the OUF-1 Unclaimed Funds Reporting Form still must be filed annually. The Ohio Department of Commerce, Division of Unclaimed Funds, in conjunction with the Ohio Business Gateway (OBG) offers companies the option of filing their Annual Report of Unclaimed Funds via the Internet. If your company currently files reports with other state agencies (sales and use tax reports) through the OBG, you may use your existing account information to log-in and file your unclaimed funds report. First-time users will have to register their company with the OBG prior to filing. If filing manually, complete the top portion of the OUF-1 form; check NO and sign the report and mail. For more information visit www.com.ohio.gov/unfd/HolderFaq.aspx.
If you have any questions or concerns about filing unclaimed funds reports, talk to your accountant or other advisers or contact the ODA legal department at (800) 282-1526.
