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TurboTax will pay $141 million in compensation to customers: Who will receive it and how to request it

Nearly 4.5 million consumers are set to receive up to $85 in compensation for being missold supposedly free tax filing software. Who qualifies?

Best tax software for filing taxes in 2023

Tax filing company Intuit have found themselves in hot water with prosecutors after the company was accused of unfairly getting customers to pay for what should be a free process. A $141 million settlement was found with some 4.4 million consumers qualifying for compensation.

The case was brought as prosecutors argued that the company diverted low-income Americans away from free tax filing assistance options towards their own paid version. They were pointed towards the TurboTax free product, then later told they needed to pay. The IRS has its own free-filing product that is totally free for qualifying taxpayers.

“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,” New York Attorney General Letitia James said in a statement.

With millions consumers across the US eligible for the payment, eyes turn toward who these people are and how much they could receive.

What is Turbotax?

Intuit’s TurboTax is tax preparation software that helps individuals and small businesses prepare and file their tax returns.

The company offers a range of products, from a free basic version for simple tax returns to more advanced versions for individuals with more complex tax situations. This free product was the problem; for many it wasn’t actually free.

How to request the compensation

People who qualify to receive a payment are:

  • TurboTax customers who used the product in the 2016, 2017 or 2018 tax years and were also eligible to use an Intuit IRS Free File;
  • Must have begun their tax returns using a TurboTax Free Edition Product but then have been informed that they were ineligible to use that product, and thus paid for a TurboTax product;
  • Consumers must also have not used the IRS Free File Product in a previous tax year.

Nothing needs to be done to secure the compensation. Expect an email in the coming weeks from a settlement fund administrator.