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USA Unclaimed Property
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Is unclaimed property taxable? What the IRS has said

It depends on what the property is. The IRS and Treasury rules cited here cover two cases: interest on savings bonds1 and retirement money paid to a state unclaimed property fund.2 This guide explains those rules; it is not tax advice.

Updated · Facts checked against official sources November 3, 2026

On this page
  1. Savings bonds
  2. IRAs and retirement plans sent to the state
  3. Interest the state adds, or does not
  4. Next step
  5. Questions people ask
  6. Sources
  • If you use the cash method and do not report it each year, savings bond interest is reported in the year you cash the bond or it matures, whichever is earlier.1
  • When an IRA is paid to a state unclaimed property fund, the payment is reported on Form 1099-R.2
  • California law says no interest is payable on unclaimed property claims.3

Savings bonds

If you use the cash method, you can postpone reporting the interest on Series EE, E and I bonds until the earlier of the year you cash or dispose of them or the year they mature.1 For HH bonds, deferred interest is reportable in the year the bond reaches final maturity or is redeemed, whichever comes first.4 A bond that matured years ago may therefore relate to an earlier tax year than the one in which you find it.

IRAs and retirement plans sent to the state

When an IRA custodian sends an account to a state unclaimed property fund, the payment must be reported on Form 1099-R,2 and withholding and reporting generally apply for the year the payment is made to the state.5 Payments from qualified plans to state funds on or after January 1, 2022, must also be reported on Form 1099-R.2

Interest the state adds, or does not

State laws differ. California’s law says interest is not payable on any claim it pays.3 Kansas law says that when interest-bearing property is delivered to the state, the owner is entitled to the interest that accrues afterwards.6 Where an official source states a rule, the state’s page shows it under “How to claim”.

Next step

To file for property you have found, follow the claim guide. If it belonged to a relative, see claiming for a deceased relative. For savings bonds and other federal programs, see other official places to check.

Questions people ask

Do I have to pay taxes on unclaimed property I get back?

It depends on what the property is. The IRS rules cited in this guide cover savings bond interest1 and retirement accounts paid to state funds.2

Sources

Footnote numbers point here. Open "Quoted text" for the exact words relied on ("[…]" marks words left out).

  1. Publication 550 (2025), Investment Income and Expenses Internal Revenue Service · irs.gov · April 30, 2026 · checked Nov. 3, 2026
    Quoted text (1)
    Method 1. Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature.
  2. Instructions for Forms 1099-R and 5498 (2026) Internal Revenue Service · irs.gov · June 23, 2026 · checked Nov. 3, 2026
    Quoted text (2)
    Payments made from IRAs to state unclaimed property funds must be reported on Form 1099-R.
    Payments made from qualified plans on or after January 1, 2022, to state unclaimed property funds must be reported on Form 1099-R.
  3. Unclaimed Property Law and Regulations (official SCO compilation of Code of Civil Procedure section 1500-1582 and 2 CCR 1150 et seq.) (PDF) California State Controller's Office · sco.ca.gov · February 2026 · checked Nov. 3, 2026
    Quoted text (1)
    (c) Interest shall not be payable on any claim paid under this chapter.
  4. Cashing HH savings bonds TreasuryDirect, U.S. Department of the Treasury · treasurydirect.gov · Aug. 1, 2024 · checked Nov. 3, 2026
    Quoted text (1)
    Deferred interest is reportable in the year the bond reaches final maturity or the year it is redeemed, whichever occurs first.
  5. Internal Revenue Bulletin 2018-25 (Rev. Rul. 2018-17) Internal Revenue Service · irs.gov · June 18, 2018 · checked Nov. 3, 2026
    Quoted text (1)
    This Revenue Ruling clarifies that federal income tax withholding under § 3405 and Form 1099–R reporting under § 408(i) generally apply for the year a payment is made, as required by State law, from an individual retirement arrangement (IRA) to a State unclaimed property fund.
  6. K.S.A. 58-3954. Crediting of dividends, interest, or increments to owner's account Kansas Office of Revisor of Statutes · ksrevisor.gov · K.S.A. current as published Nov. 3, 2026; last amended L. 2007 · checked Nov. 3, 2026
    Quoted text (1)
    (b) When interest bearing property is paid or delivered to the administrator, the owner shall be entitled to receive interest accruing thereafter.