TurboTax is paying out $141 million in settlement checks to 4.4 million Americans this month. Here's how to know if you get one.
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- Payments from a $141 million TurboTax settlement will be sent to 4.4 million Americans this month.
- TurboTax and parent company Intuit agreed to the settlement last year over allegedly deceptive ads.
- In 2016, 2017, and 2018 millions of Americans paid TurboTax to file their taxes when the IRS would have done it for free.
An estimated 4.4 million Americans will soon receive checks as part of a $141 million settlement from Intuit, the parent company of popular tax filing software TurboTax.
New York Attorney General Letitia James, who led the settlement effort, said Thursday those who are eligible will be contacted by email and checks will be distributed this month, one year after the settlement was originally announced.
"TurboTax's predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes," James said in a statement. "Today we are righting that wrong and putting money back into the pockets of hardworking taxpayers who should have never paid to file their taxes."
The settlement covers TurboTax users across all 50 states and Washington, DC, who unnecessarily paid the program to have their taxes filed in 2016, 2017, or 2018 when they would have been eligible to use the Free File Program from the Internal Revenue Service.
The state attorneys general said the company deceived Americans with advertising campaigns that emphasized its products were "free, free, free" when its gratis program only covers Americans with "simple" tax returns, as defined by the company.
The AGs said the company used the advertising to make people think their tax filing would be free, only to charge them for it once their return did not meet Intuit's definition of "simple," even though they could have filed for free through the IRS.
The average payment will be about $30, but those who paid in more than one of the three eligible tax seasons will get a payment for each year. The Thursday statement indicates the maximum someone will get through the settlement could be about $85 if they were affected all three years.
The investigation that produced the settlement stems from a 2019 ProPublica report about Intuit's deceptive marketing and behind-the-scenes lobbying to prevent the government from simplifying tax filing and making it free, which would effectively destroy TurboTax's business.
"Intuit is pleased to have reached a resolution with the state attorneys general that will ensure the company can return our focus to providing vital services to American taxpayers today and in the future," an Intuit spokesperson told Insider.
The spokesperson also directed Insider to Intuit's statement published when the settlement was first announced last year, which states the company did not admit any wrongdoing in the settlement, but did agree to alter its advertising practices.