As part of a 50-state settlement over the software maker’s practices that allegedly deceived consumers into paying for tax services that should have been free, some consumers who used Intuit’s TurboTax could get up to $85 each.
On Thursday, New York Attorney General Letitia James released a statement saying that as part of the settlement, Intuit had agreed to stop its “free, free, free” ad campaign that had promised free tax preparation but had charged many consumers for the service.
According to a 2019 ProPublica investigation, Intuit used misleading practices to steer low-income tax filers away from federally supported free services for which they were eligible and into a product that charged a fee to file tax returns. This $141 million settlement includes D.C. residents.
On May 4, the North Carolina Attorney General posted a tweet to his Twitter feed. You must read the entire tweet provided below for further information:
BREAKING: Attorney General @JoshStein_ announced that 150,074 North Carolinians tricked into paying for free tax services by TurboTax will begin receiving checks. NC consumers will receive $4,582,249 million from the settlement AG Stein reached in 2022. https://t.co/KIhH4MPHhx pic.twitter.com/PT9GfXqhbq
— NC Attorney General (@NCAGO) May 4, 2023
James said in the Thursday statement, “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.”
In an email, the business told CBS MoneyWatch, “Intuit is pleased to have reached a resolution with the state attorneys general to ensure the company can return our focus to providing vital services to American taxpayers today and in the future.”
The terms of the settlement are outlined below.
Who is Eligible for the Turbotax Settlement Funds?
Approximately 4.4 million people in the United States are said to be eligible for the payout. Customers who filed their taxes using TurboTax and were qualified to operate an Intuit IRS Free File Product in 2016, 2017, or 2018 are eligible to receive a payment.
Customers who have started their tax returns with a TurboTax Free Edition Product but have been told they are not eligible to continue using it and have subsequently paid for a TurboTax product are also eligible for this offer. In addition, customers cannot have used the IRS Free File Product in the prior tax year.
IRS Free File was available for taxpayers earning $64,000 or less in 2016.
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How to Get Your TurboTax Settlement
According to the settlement page, you are not required to do anything. If you are qualified, you should get an email from the settlement fund administrator with an estimate of your payment amount. According to the website, payments will be mailed throughout May.
How Much Will the Turbotax Settlement Check Be?
A customer’s eligibility and the number of years they’ve used TurboTax determine the payout amount. According to the site, the average customer will earn between $29 and $30. At the same time, the New York attorney general has estimated that those who filed claims for all three years included in the settlement will receive around $85.
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Why Did the Turbotax Settlement Happen?
An inquiry by multiple states concluded that Intuit engaged in “several deceptive and unfair trade practices that limited consumers’ participation in the IRS Free File Program,” as stated by the New York AG.
The examination discovered that Intuit had utilized confusingly similar names for its commercial “freemium” product and the IRS Free File service. It had also hidden the landing page for its IRS Free File service from search engine results throughout the 2019 tax filing season. According to the announcement, this prevented anyone qualified for the free file program from using the service.
According to IRS data, less than 3% of people used Free Submit in the 2020 tax year. Free File is a collaboration between the IRS and commercial tax-preparation companies that should allow nearly 70% of U.S. taxpayers to submit their forms for free. As of July 2021, Intuit was no longer a partner in the IRS’s Free File program.
On May 5, Attorney General Ken Paxton issued a statement and uploaded a tweet on his official Twitter profile. You may read the entire tweet provided to you below:
Today, I Announced A Settlement of $141 Million to Customers of TurboTax That Were Misled into Paying for Tax Filing: #TurboTax https://t.co/vKHlYoqCaB
— Attorney General Ken Paxton (@KenPaxtonTX) May 4, 2023
What if You Don’t Get Your Check?
Payments are mailed in May, although some recipients may receive their checks in June, according to the settlement website. If you have yet to receive your settlement before the middle of June, you can request a new review by visiting the settlement website. You’ll need your claimant ID from that email to proceed.
The site says, “Please check back in mid-June if you need to request a reissue after all checks have been mailed.”
