Certain TurboTax Users Could Receive Up to $85 Each in Free File Settlement

By Samantha Gowen, The Orange County Register (TNS)

At least 4.4 million TurboTax users are getting a refund this month under a $141 million multistate settlement with parent company Intuit.

New York’s Attorney General Letitia James said Thursday that eligible TurboTax users will get an email about their settlement and checks should arrive throughout May.

A year ago Saturday, Mountain View, CA-based Intuit agreed to pay millions for tricking millions of low-income tax filers into paying for services that should have been free.

All 50 states and the District of Columbia signed the agreement. An investigation into Intuit’s practices determined the company used several deceptive and unfair practices, limiting tax filers’ participation in the IRS Free File Program. According to the Office of the Attorney General, the company used “confusingly similar names for both its IRS Free File product and its commercial ‘freemium’ product.”

Intuit also used paid search advertisements to redirect consumers who were looking for the IRS Free File service to the TurboTax “freemium” product.

The company withdrew from the IRS Free File program in July 2021.

“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. I thank my fellow attorneys general for their partnership in this effort to stand up for ordinary Americans and hold companies who cheat consumers accountable.”

Here are some common questions and answers regarding the settlement:

Who qualifies? Eligible TurboTax users include those who paid to file their federal tax returns in tax years 2016, 2017 and 2018, but were actually entitled to a free filing system through the IRS’s Free File program.

Income restrictions: In 2002, Intuit agreed to provide low-income Americans and active-duty servicemembers the option to file their taxes for free, according to California’s Attorney General Rob Bonta. Intuit’s “Freedom Edition,” also called the IRS Free File Program, allowed anyone who had an adjusted gross income of $36,000 or less and was eligible for the Earned Income Tax Credit or was on active military duty and had an adjusted gross income of $69,000 or less to use the product to prepare and file their taxes for free.

How will settlement money be distributed? Be on the lookout for a check from Rust Consulting, the fund administrator.

Do I have to file a claim? No, eligible consumers will get a check in the mail without filing a claim.

How much will I get? The total amount is based on the number of tax years each user filed. Most consumers, James said, are expected to get between $29 and $30. Those who filed using TurboTax for three consecutive years could get up to $85.

How do I find out more? Go to AGTurboTaxSettlement.com.

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