As part of a 50-state settlement over the software maker’s practices that were allegedly designed to deceive customers into paying for tax services that should have been free, certain users of Intuit’s TurboTax may receive up to $85 each.
Letitia James, the attorney general of New York, said that the settlement requires Intuit to stop running its “free, free, free” advertising campaign, which promised free tax preparation yet paid many customers for the service.
The 2019 ProPublica report that found Intuit used deceptive strategies to steer low-income tax filers away from federally supported free services for which they qualified and into a product that charged a fee to file tax returns led to the $141 million settlement, which also includes residents of Washington, D.C.
“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,” James said in the Thursday statement.
In an email to CBS MoneyWatch, Intuit said, “Intuit is pleased to have reached a resolution with the state attorneys general that will ensure the company can return our focus to providing vital services to American taxpayers today and in the future.”
Here are some necessary details concerning the settlement.
Who Is Eligible For The Turbotax Settlement Money?
According to the statement, 4.4 million U.S. customers qualify for the payout.
Customers of TurboTax who utilized the software in the tax years of 2016, 2017, or 2018 and who were also qualified to use an Intuit IRS Free File Product are eligible to receive a payment.
Additionally, qualified users must have started their tax returns using a TurboTax Free Edition product before being advised that they couldn’t use it and have subsequently purchased a TurboTax product. Additionally, customers must not have previously used the IRS Free File Product.
For taxpayers who earned $64,000 or less during the 2016 tax year, IRS Free File was an option.
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How To Get Your TurboTax Settlement Check?
According to the settlement page, nothing has to be done.
If you qualify, the settlement fund administrator should send you an email with the approximate amount of your payment.
The website states that payments will be mailed out during May.
How Much Will The TurboTax Settlement Check Be?
The amount is determined by the qualifying factors and the years the user used TurboTax.
The majority of consumers will earn between $29 and $30, according to the website. Still, according to the New York attorney general, some people who submitted for all three of the settlement’s applicable years could receive as much as $85.
Why Did The TurboTax Settlement Happen?
A multi-state investigation found that Intuit used “several deceptive and unfair trade practices that limited consumers’ participation in the IRS Free File Program,” according to the New York AG’s statement.
For instance, the study discovered that Intuit utilized names identical to those of the IRS Free File service and its commercial “freemium” product.
It also blocked its IRS Free File landing page from search engine results throughout the 2019 tax filing season. According to the statement, this essentially prevented users who qualified for the free file program from using the service.
Approximately 70% of American taxpayers should be able to submit their tax returns for free thanks to Free Submit, a collaboration between the IRS and for-profit tax preparation firms.
However, according to IRS data, less than 3% of filers used Free File in the 2020 tax year.
In July 2021, Intuit ceased participating in the IRS Free File program.
What If I Don’t Get My Check?
Although payments start mailed out in May, the settlement website warns that some consumers could not get their checks until June.
If you still haven’t received your check by mid-June, you can go to the settlement website and request that a payment be reissued. You’ll need the claimant ID number from the email you received to complete that.
“Please check back in mid-June if you need to request a reissue, after all checks have been mailed,” the site says.
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