TurboTax will be sending millions of settlement checks to customers

Millions of taxpayers will receive settlement checks from TurboTax.

Who will be getting the payments?

TurboTax discouraged people from filing their returns for free.

Intuit, the parent company of TurboTax, will pay $141 million in restitution to millions of taxpayers across the country who were unfairly charged for tax services that should have been free, New York Attorney General Letitia James said.

In a settlement last year, the company that owns TurboTax was ordered to pay $141 million to about 4.4 million people across the country. Those affected were low-income taxpayers eligible for federally supported free tax services.

TurboTax to send millions of settlement checks

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Checks will be mailed starting next week and throughout May. Customers will be paid between $29 and $85 each, depending on the number of fiscal years for which they qualify. TurboTax is an online service for preparing and filing tax returns.

This week, Josh Stein, the North Carolina attorney general, reported that he reached an agreement with the company for $4.5 million, which will be distributed to the more than 150,000 affected residents in the state.

Which states will benefit?

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«Eligible taxpayers include those who paid to file their federal tax returns through TurboTax for tax years 2016, 2017, and 2018. But were eligible to file for free through the IRS Free File Program,» the statement said.

All 50 states and the District of Columbia have signed the agreement. New York will receive more than $5.4 million for more than 176,000 New Yorkers who were tricked into paying to file their federal taxes.

The problem with TurboTax

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TurboTax owner Intuit agreed in May 2022 to pay $141 million to lower-income Americans who were “unfairly charged”, they said, for free tax-filing software as part of a multi-state settlement.

According to Telemundo, approximately 4.4 million consumers were affected. An Intuit spokesperson said the company is “pleased to have reached a resolution with the state attorneys general.»

TurboTax apologizes

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Under the terms of last year’s settlement, Intuit Inc. agreed to discontinue TurboTax’s “free, free, free” ad campaign. According to documents obtained by ProPublica, Intuit executives were aware of the impact of announcing free services that weren’t really free for everyone.

“Intuit misled millions of low-income Americans into believing they would receive free tax filing services to which they were entitled,” they said in a statement released Wednesday.