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TurboTax’s $141M Settlement: Who Is Eligible to Claim Money and Why?

This story is part of Taxes 2022CNET’s coverage of the best tax software and everything else you need to file your tax returns quickly, accurately, and on time.

TurboTax’s parent company, Intuit, has agreed to pay $141 million in compensation under the Federal Trade Commission lawsuit filed Allegedly, millions of clients have been tricked into paying for tax preparation services that are supposed to be free.

The FTC claims that in 2020 alone, two-thirds of eligible claimants were unable to use TurboTax Free Edition, including gig workers and those earning farm income. Investigators said Intuit also engaged in deceptive marketing and commercial practices, including deliberately blocking its IRS Free File landing page from search engine results.

The company also lured people with ads promoting its free edition “just to trick them into paying,” according to New York Attorney General Letitia James, who brokered the multi-state settlement.

“For years, Intuit has misled the most vulnerable among us for profit,” James said in a May 4 statement. “This agreement should serve as a reminder to businesses large and small that engaging in these deceptive marketing ploys is illegal.”

In a statement, Intuit admitted no wrongdoing and said it agreed to the deal “to put this matter behind”.

Find out below how much affected customers can expect from the comparison and if you qualify.

Who is eligible for TurboTax billing?

Intuit is providing refunds to nearly 4.4 million people across all 50 states who used the Free Edition of TurboTax between tax years 2016 and 2018.

These individuals were told that they would have to pay to file even though they qualified for the IRS Free File program, a partnership between the agency and major tax preparation software companies. Individuals and families with an adjusted gross income of less than $73,000 are typically eligible for the Free File program, as are military members.

How do I find out if I qualify?

No action needs to be taken, according to Halimah Elmariah, a spokeswoman for the New York Attorney’s Office. Authorized TurboTax users will receive notification by email or letter.

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Affected customers receive approximately $30 for each year they were tricked into paying for archiving services.

Naomi Antonino/CNET

How do I submit a settlement claim to TurboTax?

If you qualify, you’ll automatically receive a direct payment of about $30 for each year you’ve been tricked into paying for signup services, according to James’ office.

The checks stem from the $141 million settlement, less $2.5 million in administrative expenses.

When will I receive payment?

Because the settlement involves multiple states, payments are processed through a third-party administrator. An exact timeline isn’t set yet, but Elmariah told CNET that she expects the checks to be mailed out in the next few months.

For more information, see How to protect your money from cell fraud and what to do if you Tax refund has not arrived. If you missed the tax deadline this year, Here’s what you should do next.

https://www.cnet.com/personal-finance/taxes/turbotaxs-141-million-settlement-who-is-eligible-to-claim-money-and-why/ TurboTax’s $141M Settlement: Who Is Eligible to Claim Money and Why?

Chris Barrese

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