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When determining how to handle an unclaimed or uncashed payroll check, you need to review state law, the accounting for any voided checks, and W-2 issues, including Social Security and unemployment benefits.

Each state has its own laws for unclaimed property. And there are specific rules for the accounting of a voided check. After a reasonable time, void the check and move the funds to an escrow account pending claim by the employee or submission to the state. Once the check is issued to pay the employee for his services, the money no longer belongs to the employer. Under no circumstances should the funds be returned to the general checking account.

Medicare, Social Security and unemployment taxes must be paid as if the employee had indeed claimed the check.

For more information about unclaimed property in Pennsylvania, visit the Treasury Department's website at www.patreasury.org.

Contact Tax Specialist, Crystal Martin at 1-717-757-6999 or 800-745-8233, or you may email her by using the form below. Our firm can help you handle unclaimed or uncashed payroll checks properly so that your firm isn't subject to potentially substantial penalties.
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any US tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.

Securities and advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC. Geneos Wealth Management, Inc is not affiliated with Stambaugh Ness.