Over 4.4 million users of TurboTax are in for a pleasant surprise as they may be eligible to receive an unexpected refund in the near future. This is because Intuit, the parent company of TurboTax, has agreed to pay $141 million to consumers in a multistate settlement. The settlement comes after authorities claimed that TurboTax had deceived customers into paying for services that were supposed to be free. As a result, payments from the settlement are now being distributed, and affected users could receive up to $85.
In a statement, New York Attorney General Letitia said, “TurboTax’s predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes.” The refund is being offered to individuals who used TurboTax to file their federal tax returns in 2016, 2017, and/or 2018 but were eligible to file for free through the IRS’s Free File Program. It’s estimated that more than 4.4 million people may be eligible to receive up to $85 in refunds due to a settlement reached between TurboTax’s parent company, Intuit, and multiple states.
TurboTax is a tax preparation software that millions of people use to file their federal and state taxes in the United States. The software is designed to simplify the tax preparation process and guide users through each step of the tax return process. TurboTax offers a variety of products, including online and desktop versions, as well as mobile apps. The software is updated each year to reflect any changes to the tax code and includes tools and calculators to help users maximize their deductions and credits.
TurboTax parent company to pay $141 million in multistate settlement
Intuit, the parent company of TurboTax, recently agreed to pay $141 million as part of a multistate settlement after being accused of tricking consumers into paying for services that should have been free. The settlement affects more than 4.4 million TurboTax users who filed their federal tax returns via the platform in 2016, 2017, and/or 2018 and could have filed for free through the IRS’s Free File Program.
The disbursement of payments from the settlement began this week, with affected users receiving notifications via email from the Rust Consulting settlement fund administrator. While most eligible consumers will receive refunds of $29 or $30, those who paid to file via TurboTax for three consecutive years will receive refunds of $85.
It’s worth noting that affected users don’t need to file a claim to receive the refund. Intuit denies any wrongdoing in the settlement and claims that the penalty will have a “minimal impact” on its business.
Intuit Agrees to Business Practice Changes Following Settlement
If you think you may be eligible for a refund, you can visit the official website for the settlement to learn more about the process and determine your eligibility. In addition to the monetary settlement, Intuit also agreed to make several changes to its business practices. These changes include prominently displaying a link to the IRS’s Free File Program on its website and updating its marketing materials to clarify that free options are available for those who meet the eligibility criteria.
The settlement was reached after an investigation by multiple state attorneys general found that Intuit had engaged in deceptive marketing practices, which resulted in millions of consumers paying for services they could have received for free. While Intuit denies any wrongdoing in the settlement, the company has agreed to the terms to restate the matter and avoid further legal action. The penalty is not expected to significantly impact Intuit’s financials, as the company reported $7.7 billion in revenue for the 2021 fiscal year.
There is no need to file a claim for those eligible for the refund. The Rust Consulting settlement fund administrator will notify affected consumers via email, and checks will be sent out automatically. Taxpayers can visit the official website for the settlement to learn more about the process. Overall, the settlement serves as a reminder to consumers to carefully review their options when filing their taxes and be aware of the free resources available.