Overview
Intuit, the company behind TurboTax, has announced that it will pay a record-breaking $141 million in restitution to 4.4 million lower-income customers. The customers were charged for TurboTax Free Edition, even though they were entitled to free tax filing services. Let’s take a look at the specifics of this settlement and who is eligible for compensation.
Table of Contents
Background
- TurboTax is one of the most popular tax filing software in the United States.
- The problem came when many taxpayers who were supposed to receive free tax filing services were charged by TurboTax.
The Settlement
- In May 2022, Intuit settled with all 50 states and the District of Columbia.
- Under the terms of the settlement, Intuit pays $141 million in damages to the injured taxpayers.
- The purpose of the settlement is to make amends to those who were mislead by false promises of free tax filing services.
Who Qualifies for Compensation?
You may be eligible for the settlement if:
- Did you use TurboTax for federal returns in tax years 2016, 2017 or 2018?
- You qualified for the free version of the software through IRS Free File.
- Have you filed federal returns in 2016, 2017 or 2018 using Intuit’s free software, but were later informed that you are ineligible for the free version?
- You have made a payment to Intuit for completing your return and have not used Intuit’s Free File product within the last 12 months.
Payment Details
- The settlement fund administrator, Rust Consulting, will then send an email to eligible consumers.
- Checks will start being sent out next week.
- While most consumers can expect to get around $30 back, those who have used TurboTax three years in a row can get up to $85 back.
- Depending on the date of mail delivery, some cheques may arrive at the end of June.
Conclusion
This settlement is an important step towards equity and transparency in the tax filing process. If you think you’re eligible, check your inbox for more information.
TurboTax users can rest easy knowing that restitution is about to begin.
How to check eligibility for Turbo Tax compensation?
TurboTax Usage:
- If you filed federal tax returns in 2016, 2017 or 2018 using TurboTax, you may be eligible.
- In addition, you should have qualified for TurboTax’s free version through the IRS Free File program.
Eligibility Details:
- The settlement is only applicable to people who:
- If you qualified for Free File and began your federal return in 2016, 2017 or 2018 using Intuit’s free software.
- They were later told that they were ineligible for the free plan.
- If you have paid Intuit to finish your return and have not used Intuit’s Free File product in the previous 12 months, you may be entitled to compensation.
Income Threshold:
- Taxpayers with an adjusted gross income (AGI) of $73,000 or less were eligible for Free File for 2022.
- For tax year 2016, the threshold was set at $64,000.
Payment Expectations:
- If you qualify, you’ll receive an email from the settlement fund administrator – Rust Consulting.
- Checks will start being sent out next week.
- While most consumers will get around $30, those who have used TurboTax three years in a row may get up to $85.
- Depending on the date of mail delivery, some cheques may arrive at the end of June.
How to avoid being charged for free services?
To avoid unexpected charges when using TurboTax or other services, follow these best practices:
Understand Eligibility and Limits:
- Make sure you’re eligible for TurboTax’s free version through IRS Free File.
- Be aware that free services have limits. You only get a certain amount each month, and it doesn’t roll over. For instance, if you get 5GB of free storage each month, use that wisely and you won’t go over your limit.
Monitor Usage:
- Check your service usage on a regular basis. For TurboTax, make sure you are within your free service limits.
- Track your usage to avoid surprise fees.
Upgrade Before Expiry:
- If you’re using a free account, be aware of the credit expiration (usually after 30 days).
- Make sure to update your account before you run out of credit so you can keep using services without interruption.
- You’ll be able to use the services for free for a 12-month period after you upgrade, and you will only be charged if you use them beyond the free period.
Terminate Unused Resources:
Once you’ve finished using a service, “uninstall” or “remove” any resources that are associated with it.
Unused resources can accumulate charges, so clean up your account regularly.
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