If you use TurboTax you may be owed money. How settlement payments will work
NEW YORK (NEXSTAR/WETM) - Millions of taxpayers who used the popular Intuit filing software TurboTax in recent years will receive money from a 50-state, $141 million settlement accusing the company of charging people for services that should have been free.
“Intuit cheated millions of low-income Americans out of free tax filing services they were entitled to,” said New York Attorney General Letitia James said in a statement Thursday. “For years, Intuit misled the most vulnerable among us to make a profit. Today, every state in the nation is holding Intuit accountable for scamming millions of taxpayers, and we’re putting millions of dollars back into the pockets of impacted Americans."
The investigation into Intuit's business practices stemmed from two versions of TurboTax: one created through participation in the IRS Free File Program – designed for military members and those making less than $34,000 – and a second, "TurboTax Free Edition," which the company heavily marketed in ads that repeated the word "free" dozens of times.
In 2021, Intuit said in a blog post that it was withdrawing from the Free File Program citing "limitations" that kept it from providing more benefits.
The second version, however, was only free for taxpayers with "simple returns," as defined by Intuit. Investigators from James' office and those of multiple states found that while the TurboTax Free Edition was only free for roughly 30% of the population, while the IRS-partnered version was free for about 70% of taxpayers.
Who is eligible to receive money, and how much?
Anyone who paid TurboTax for their federal tax returns for the 2016, 2017, or 2018 tax years but was eligible for the IRS Free File Program could see a check in their mailbox.
After getting an email from settlement fund administrator Rust Consulting, they will get a check automatically without having to file a claim.
According to the agreement, Intuit will provide restitution for almost 4.4 million people. The direct payments will be roughly $30 for each year that the taxpayer should not have had to pay for TurboTax, according to the New York AG's Office.
People who are part of the case will be contacted by email about their individual checks and may see the money starting next week.