IBA Compliance Connection

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Under the new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA), are Roth IRAs treated as IRAs? The law refers to “tax-deferred retirement accounts,” and my understanding is that Roth IRAs are not considered tax-deferred because they are funded with after-tax dollars.

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We believe that the Illinois RUUPA provisions governing tax-deferred retirement accounts should apply to Roth IRAs, based on informal verbal guidance from the Illinois Treasurer’s office.

We posed this question to an attorney with the Illinois Treasurer’s office, who told us that the Illinois RUUPA provisions applicable to accounts qualifying “for tax deferral under the income-tax laws of the United States” were intended to apply to Roth IRAs. In other words, IRAs and Roth IRAs are subject to the same treatment under the Illinois RUUPA.

We recommend staying tuned for the Illinois Treasurer’s planned administrative rules, which may confirm their informal verbal guidance.

For resources related to our guidance, please see:

  • Illinois RUUPA, 765 ILCS 1026/15-202 (“When tax-deferred retirement account presumed abandoned. (a) Subject to Section 15-210, property held in a pension account or retirement account that qualifies for tax deferral under the income-tax laws of the United States is presumed abandoned if it is unclaimed by the apparent owner after the later of: . . .”)