TurboTax users will get up to $85 each in settlement over free filing deception

TurboTax users will get up to  each in settlement over free filing deception

The company behind the TurboTax tax-filing program us paying $141 million to customers across the United States who were deceived by misleading promises of free tax-filing services. (Photographer: Susan Goldman. Bloomberg News)

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

In California, an estimated 370,000 low-income TurboTax users will share about $11.4 million from the settlement.

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-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.”

WASHINGTON, DC – APRIL 17: Advocates gather in Washington, DC to call out tax prep companies like Intuit TurboTax and H&R Block for blocking simplified filing and to support Internal Revenue Service (IRS) exploration of alternative free tax filing on April 17, 2023 in Washington, DC. (Photo by Tasos Katopodis/Getty Images for Economic Security Project) 

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’ 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 AGI 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.

MORE TAX NEWS: Middle Class Tax Refund: Early filers can amend 2022 returns to recoup taxes

How much will I get? The total amount is based on the number of tax years each user filed. Most consumers, the New York AG 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.

DON’T FORGET! Tax tips for Californians: Deadline isn’t April 18, and many can file for free

View more on
Silicon Valley

Source link

Scroll to Top