North Carolina Abandoned Property Law: Reporting, Claims, and Penalties

North Carolina’s unclaimed property law, Chapter 116B of the General Statutes, requires banks, employers, insurers, and other businesses to turn over dormant assets to the state Department of State Treasurer once an owner has been out of contact for a set number of years. The state currently holds over $1 billion in these assets and returns them to rightful owners through NCCash.com with no deadline for filing a claim.

When Property Is Considered Abandoned

Property becomes presumed abandoned after a dormancy period during which the owner has no contact with the holder. The clock length depends on the type of property.¹

Wages and payroll: one year from the date payable to the employee.²
Bank accounts, certificates of deposit, and most financial holdings: five years with no owner-initiated activity.¹
All other property not otherwise listed: five years after the owner’s right to demand the property first arises.¹

The dormancy clock resets whenever the owner takes some affirmative action showing awareness of the property: making a deposit, cashing a check, updating contact information, or responding to correspondence from the holder. An expired contractual or statutory limitation period does not prevent property from being classified as abandoned or relieve the holder of reporting duties.³

How to Search for and Claim Your Property

The Department of State Treasurer runs a free search at NCCash.com covering assets turned over by banks, insurers, employers, utilities, and other holders.⁴ You search by name and can check the status of a pending claim through the same site.⁵

If you have lived in more than one state, searching only North Carolina’s database can miss assets held elsewhere. MissingMoney.com, run by the National Association of Unclaimed Property Administrators, searches most participating states at once at no cost.⁶ Federal assets use separate tools: the IRS “Where’s My Refund?” tool for overdue refunds, and TreasuryHunt.gov for matured savings bonds.⁷

Once you find a match, you submit a formal claim through the Treasurer’s website or by mail. Documentation depends on the property’s type and value, but expect to provide a government-issued photo ID and proof of your connection to the address on file. The Treasurer’s office reviews each claim before releasing funds or returning physical assets.⁴

There is no filing deadline. North Carolina holds unclaimed assets for the rightful owner indefinitely.⁸ One caveat: once property is transferred to the Treasurer, any interest, dividends, or other earnings it generates stay with the state, even if you later recover the principal.⁹ Claiming sooner avoids losing those earnings.

Claims by Heirs and Estates

If the original owner has died, an heir, executor, or estate administrator can file. You will typically need a certified death certificate and legal documentation establishing your authority over the estate: a probated will, letters testamentary, a court order, or an affidavit of heirship. The Treasurer’s office may request additional paperwork depending on the circumstances.

Taxes on Recovered Property

Recovering your own money generally does not create new taxable income. An old bank balance or an uncashed paycheck is not a second taxable event, because you already owed tax on it in the year you originally earned it. Interest is different. If the state pays you interest on the recovered property, that interest is taxable. Any interest payment of $10 or more should be reported to you on Form 1099-INT, though you owe tax on the full amount even without a form.¹⁰

Retirement plan distributions are treated differently. When a qualified retirement plan sends an unclaimed benefit to a state unclaimed property fund, the entire distribution is taxable income to the participant and is reported on Form 1099-R, with federal tax withheld before the funds transfer.¹¹ Sorting out that withholding when you later recover the money often calls for a tax professional.

Holder Duties: Notice, Reporting, and Records

Businesses, banks, insurers, government agencies, and any other entity holding property for someone else have three main duties under Chapter 116B: sending due diligence notices, filing annual reports, and keeping records.

Due Diligence Notices

Before reporting property as abandoned, a holder must try to reach the owner. For securities or equity interests worth $25 or more, or any other property worth $50 or more, the holder must send a first-class mail notice to the apparent owner’s last known address. Timing is specific: no more than 120 days and no fewer than 60 days before the annual report is filed.⁹

The notice must describe the property, name the holder with contact information, state the planned report date, and tell the owner that the property will go to the Treasurer if they do not respond within 30 days of that date. It must also disclose that future earnings on the property stay with the state.⁹ Holders can outsource the mailings, but legal responsibility stays with the holder.

Annual Reporting

Holders file a report with the Department of State Treasurer before November 1 each year, covering the 12-month period ending the prior July 1. Life insurance companies file before May 1 for the preceding calendar year.¹² The report identifies each unclaimed item with the owner’s name, last known address, and value, and monetary property is remitted with the report.

Record Retention

After filing, holders must keep the underlying records for at least five years. For businesses issuing traveler’s checks, money orders, or similar instruments on which they are directly liable, the period is three years, but the records must be kept as long as the instruments remain outstanding.¹³ Auditors typically look back ten years, so retention practice matters.

Gift Card and Business-to-Business Exemptions

A gift card or gift certificate is not treated as abandoned property when it conspicuously states it does not expire, bears no printed expiration date, or states that any printed expiration date does not apply in North Carolina.¹⁴ Because most retailers now issue cards with no expiration, the vast majority of unredeemed cards never enter the unclaimed property pipeline. Holders should confirm their cards meet one of the three conditions to avoid triggering a reporting duty by accident.

The state also offers a partial exemption for property owed by one business to another rather than to an individual consumer. The exemption applies selectively, covering some property categories but not others, and how the state defines a qualifying business matters. Due diligence may still be required for exempt items. Holders with meaningful business-to-business receivables should review their situation carefully before relying on the exemption; misclassifying property carries the same penalty exposure as any other noncompliance.

Penalties for Noncompliance

A holder that fails to report, pay, or deliver property on time owes interest to the Treasurer from the date the property should have been turned over. The Treasurer sets the rate every six months, and it cannot fall below 5% or rise above 16% per year.¹⁵ Interest applies whether or not the failure was intentional.

When a holder willfully fails to report, pay, or deliver property, or willfully neglects other Chapter 116B duties including the notice requirement, the penalties climb sharply. On top of interest, the holder faces $1,000 per day the violation continues, capped at $25,000, plus 25% of the value of any property that should have been reported. For a company sitting on a large volume of unreported property, the 25% surcharge can dwarf the daily cap. Fraudulent reports carry the same structure: $1,000 per day from the date the report was due, capped at $25,000, plus 25% of unreported value, plus interest.¹⁵

The Treasurer has discretion to waive interest and willful-failure penalties in whole or in part for good cause. That authority does not extend to fraudulent report penalties.¹⁵ Waivers are far more likely when a holder self-reports than when violations surface during an audit.

Voluntary Disclosure Program

Holders that have fallen behind can enter North Carolina’s Voluntary Disclosure Program. Participants become eligible for a full waiver of the interest and penalties that would otherwise apply to past-due property.¹⁶ Given interest of 5% to 16% per year and willful-failure penalties reaching $25,000 plus 25% of unreported value, coming forward before an audit begins puts the holder in a far stronger position than waiting to be caught.

Restrictions on Professional Locators

Locators (sometimes called finders or heir-search firms) contact people who have unclaimed property and offer to recover it for a fee. North Carolina imposes several restrictions.

The key one is a blackout period. Any agreement between a locator and an owner is void if it was entered into between the date the property was presumed abandoned and 24 months after the property was delivered to the Treasurer.¹⁷ A locator cannot contact you about newly reported property and lock you into a contract right away. The blackout does not apply to an attorney you hire to file a claim or contest a denial.

Outside the blackout, a locator agreement is enforceable only if it is in writing, describes the property and services, is signed by the owner, and states the property’s value both before and after the fee is deducted. Anyone operating as a locator must register annually with the Treasurer and pay a $100 registration fee.¹⁷ Because NCCash.com is free and takes only a few minutes, most people are better off searching for themselves first.

ERISA Retirement Plans

Employer-sponsored retirement plans governed by ERISA sit outside most of this framework. The U.S. Department of Labor takes the position that ERISA preempts state unclaimed property statutes, so North Carolina cannot compel a plan fiduciary to hand over a missing participant’s retirement benefits.¹⁸ Federal courts have consistently reached the same conclusion.

Voluntary transfers are allowed under tight conditions. Under 2025 DOL guidance, a plan fiduciary may voluntarily transfer a missing participant’s benefit to a state unclaimed property fund only when the present value is $1,000 or less, the fiduciary has followed a prudent search process and still cannot locate the participant, and the transfer goes to the fund in the state of the participant’s last known address. The plan’s summary plan description must also disclose that transfers to state funds may occur.¹⁸ For benefits above $1,000, plan fiduciaries generally cannot use state unclaimed property funds as a disposition option at all.

1
North Carolina General Assembly. North Carolina Code 116B-53 – Presumptions of Abandonment
2
NCCASH. Guide to Unclaimed Property Uncashed or Unpresented Checks
3
North Carolina General Assembly. North Carolina Code 116B-71 – Periods of Limitation
4
NC Treasurer. Unclaimed Property
5
North Carolina Unclaimed Property. Unclaimed Property Homepage
6
National Association of Unclaimed Property Administrators (NAUPA). Find and Claim Your Missing Money
7
USAGov. How to Find Unclaimed Money From the Government
8
NCCASH. Claims Frequently Asked Questions
9
North Carolina General Assembly. North Carolina Code 116B-59 – Notice to Apparent Owner
10
Internal Revenue Service. Topic No. 403, Interest Received
11
IRS. Rev. Rul. 2020-24 Withholding and Reporting With Respect to Payments From Qualified Plans to State Unclaimed Property Funds
12
North Carolina General Assembly. North Carolina Code 116B-60 – Report of Abandoned Property
13
North Carolina General Assembly. North Carolina Code 116B-73 – Record Retention
14
North Carolina General Assembly. North Carolina Code 116B-54 – Exclusion for Certain Gift Certificates or Electronic Gift Cards
15
North Carolina General Assembly. North Carolina Code 116B-77 – Interest and Penalties
16
NCCASH. Voluntary Disclosure Program Frequently Asked Questions
17
Justia. North Carolina Code 116B-78 – Agreement to Locate Property
18
U.S. Department of Labor. Field Assistance Bulletin No. 2025-01