What Is an Unclaimed Dividend and How Do I Claim It?
Shareholders may be owed lost dividend payments. This guide provides a complete overview of the process for locating, documenting, and recovering your assets.
An unclaimed dividend is a payment from a company to a shareholder that was never cashed or deposited. This can happen if a shareholder moves without updating their address, loses a dividend check, has outdated bank account information, or in the event of a shareholder’s death where heirs are unaware of the stock.
After a period of three to five years, as determined by state law, these unclaimed funds are turned over to the state’s unclaimed property office in a process called escheatment. The state then holds the funds indefinitely until the rightful owner or their heir files a claim.
Where to Search for Unclaimed Dividends
The primary place to begin your search is with state unclaimed property offices. Every state has a department responsible for holding abandoned assets, including dividend checks, until the rightful owner is found. While you can search these state databases individually, this can be time-consuming if you have lived in multiple locations.
A more efficient method is to use a national database that compiles information from most state programs. The National Association of Unclaimed Property Administrators (NAUPA) operates a free website that acts as a centralized search tool, allowing you to search multiple state databases simultaneously and simplifying the process.
You can also contact the investor relations department of the company that issued the stock. If the dividend is recent and has not yet been escheated to the state, the company or its designated transfer agent will have records of the outstanding payment. A transfer agent is a financial institution hired to manage a company’s shareholder records, and its contact information is on the company’s investor relations website.
Required Information to File a Claim
To file a claim, you must gather specific information to prove your identity and ownership. You will need to provide your full legal name, including any previous or maiden names you have used. It is also necessary to list all previous addresses, as the unclaimed property may be registered to an older location. Your Social Security Number is a standard requirement for verification.
You will also be required to submit copies of official documents. A government-issued photo ID, such as a current driver’s license or passport, is necessary to confirm your identity. You will also need proof of your connection to the address on record for the property, which can be a utility bill or an old tax return. The most direct proof of ownership is a copy of an old brokerage statement or the original stock certificate, if available.
Submitting Your Claim
Once you have your documents, you can submit your claim. Most state unclaimed property offices offer multiple methods for filing, including by mail or through an online portal. The traditional approach is to mail the physical claim form along with photocopies of your supporting documentation. When mailing, it is advisable to use certified mail with a return receipt to have a record of delivery.
Many states now offer a faster online submission portal where you can fill out the claim form and upload scanned copies of your documents. After an online submission, you should receive an immediate confirmation number or email.
After submitting your claim, the agency will begin its verification process. You should receive a confirmation of receipt, often including a claim number for tracking. The agency will provide an estimated processing timeline, which can range from a few weeks to several months. If any information is missing, a claims examiner will contact you to request the additional details.
Tax Implications of Claimed Dividends
When you successfully recover an unclaimed dividend, the amount you receive is considered taxable income. The dividend is taxable in the year you actually receive the payment from the state or paying agent, not the year the dividend was originally issued. This means if you receive a dividend in 2025 that was originally payable in 2015, you must report it on your 2025 tax return.
The entity that pays you the reclaimed dividend, whether it is the state’s unclaimed property division or the company’s transfer agent, may issue an IRS Form 1099-DIV. This form reports the amount of the dividend payment to both you and the IRS. You should wait to receive this form before filing your taxes for the year.
You must report this income on your federal tax return. The tax rate applied to the dividend depends on whether it is classified as a qualified or non-qualified dividend. This classification is determined by the nature of the original dividend payment and your holding period of the stock. Qualified dividends are taxed at lower long-term capital gains rates, while non-qualified dividends are taxed at your ordinary income tax rate. The Form 1099-DIV you receive should indicate the type of dividend paid.