Checks Are in the Mail for $141 Million TurboTax Settlement — Who Qualifies?
Checks are being mailed to taxpayers eligible to receive restitution in a $141 million TurboTax settlement. Are you a possible recipient? Find out!
May 5 2023, Updated 2:38 p.m. ET
Low-income Americans who used TurboTax’s Free Edition to file their taxes between 2016 and 2018, but ended up having to pay for it, may soon be getting a check in the mail from TurboTax's parent company Intuit. The checks are part of a $141 million TurboTax settlement Intuit agreed to in May 2022.
Last year, a multi-state investigation was launched into Intuit’s marketing of its TurboTax Free Edition after ProPublica reported the company was allegedly using a bait-and-switch type scheme to steer users toward its commercial products.
Most taxpayers have access to free tax filing through the IRS.
The Internal Revenue Service (IRS) offers free tax filing products that are available for most taxpayers. Intuit partnered with the IRS Free File Program up until July 2021 to allow taxpayers earning about $34,000 and military members to file their taxes for free with TurboTax. Under the partnership, the IRS agreed not to compete with TurboTax by promoting its own free tax filing services.
TurboTax heavily promoted its “TurboTax Free Edition,” sometimes repeating the word “free” numerous times in a 30-second advertisement. However, the TurboTax product wasn't free for everyone. TurboTax steered many users to its “freemium” product for taxpayers with “simple returns,” which is only free for about a third of taxpayers, versus the IRS program, which is free for 70 percent of taxpayers.
“Intuit cheated millions of low-income Americans out of free tax filing services they were entitled to,” said New York Attorney General Letitia James in a 2022 press release announcing the Intuit settlement.
“For years, Intuit misled the most vulnerable among us to make a profit,” James said. “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. This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal.”
Intuit didn’t admit to any wrongdoing.
Although Intuit didn’t admit to any wrongdoing, the company agreed to pay restitution to almost 4.4 million customers who started using TurboTax’s Free Edition for tax years 2016, 2017, and 2018, only to be told that they need to pay to file when they would have been eligible for the IRS Free File program.
Duped customers will receive checks in the mail.
If you qualify to receive restitution in the TurboTax settlement, you will receive $30 for each year between 2016 and 2018 that you used and paid for the TurboTax Free Edition.
There is no need to file a claim to receive your restitution payment. Customers who are eligible to receive a restitution payment will be notified by email and automatically sent a check in the mail. Payments will be mailed throughout May 2023. The settlement applies to eligible taxpayers in all 50 states and Washington, D.C.
You can learn more about the settlement at www.AGTurboTaxSettlment.com.