Special notification relating to State of NJ Unclaimed Property “Negative Reporting” Reporting Obligations
October 8, 2017
Alert from the NJ Unclaimed Property Administration To All Business Owners in New Jersey - October 31, 2017 Deadline
All 50 states and the District of Columbia have varying rules for reporting abandoned or unclaimed property. Abandoned or unclaimed property consists of many types of intangible and tangible properties that have remained unclaimed by its rightful owner for a specific period of time.
The State of New Jersey has an Unclaimed Property Administration (UPA) Department that recovers and records abandoned or lost intangible and tangible property. The UPA’s goal is to return this property to the rightful owner and/or heirs. NJ Unclaimed Property Statute states that property owners never relinquish the right to this property and that the UPA acts as a custodian until the property is returned.
The abandonment period for each type of property is defined by New Jersey's Unclaimed Property Statute and varies dependent on the property type. Property is generally deemed to be abandoned if not claimed within a 3 year period of time, but the abandonment period can be as short as 1 year for items like payroll checks and utility deposits. Once the property has been abandoned for longer than the designated period, the holder of the property is required to turn the property over to the State of New Jersey.
Reporting Abandoned or Unclaimed Property by NJ Businesses
The State of New Jersey’s Unclaimed Property Administration (UPA) has issued a special reminder to all businesses with an operating presence in the State of New Jersey of their obligation to report abandoned or unclaimed funds to the UPA. Property deemed abandoned as of June 30, 2017, should be reported and remitted by no later than Tuesday, October 31, 2017.
A copy of the reminder and other important reporting information can be found at http://unclaimedproperty.nj.gov/pdf/HolderReportingReminder.pdf.
These rules apply to all types of businesses, regardless of their legal structure. This means that corporations, LLC’s, partnerships, sole-proprietors, trusts, and non-profit organizations are subject to these reporting requirements.
The UPA Online Holder Reporting application allows the business community to create an account, submit annual reports, and remit unclaimed property funds to the State. The UPA requires all Holders to utilize the online system.
Negative Reporting Requirement
Most business entities have known about and have complied with the customary Unclaimed Property reporting requirements. The UPA reminder notice brings to light however a little known or publicized provision of the law requiring “negative” reporting.
The UPA notice states the “All businesses that are either incorporated in New Jersey or have a business presence in New Jersey are required to file negative reports (reports with no property) when there is no property to report or remit for that given year.”
This means that a negative filing must be submitted annually even if the holder does not have any property to report for the most recent reporting period.
In other words, every business operating in the State of New Jersey is required to file a report by Tuesday, October 31 regardless of whether the entity has abandoned or unclaimed property to report.
All “Negative Reports” must be submitted using the Online Holder Reporting application. This filing requirement provides the UPA with a confirmation that Holders performed their due diligence in reviewing their books to ensure there are no unclaimed property obligations.
The NJ Statutes include provisions for penalties to be assessed for failure to render a report or willful failure to report, and range from $200 - $1,000 per day for each day the report is withheld or the duty to satisfy an obligation is not met. These penalties appear to also apply to failure to submit “Negative Reports”.
If you have questions or concerns about this filing requirement, please contact Shapiro Financial Security Group at 732-739-8991 or email us at Plan@ShapiroFSG.com