Tax day was Monday, April 18th this year, so I hope you filed in time to avoid any IRS penalties!
Many of us take advantage of easy-to-use tax software such as TurboTax to prepare our taxes and submit them to the IRS in a flash. But, it seems that Intuit, the producer of this popular tax software, seems to have duped millions of hard-working American taxpayers. When using the “free version” of the software to file their tax returns in 2016 and 2018, many actually had to pay a fee. Now, Intuit will provide restitution and refund the affected customers. Let’s dive into what this means and if you’re entitled to money back.
Intuit, the owner of popular tax filing software TurboTax, is slated to pay $141 million in restitution to millions of low-income Americans who were “unfairly charged” for services that should have been free, according to a multistate agreement announced last week. These customers were eligible for the IRS Free File Program in partnership with TurboTax. Although this software version was “free,” it was “free” only for simple returns. If a customer had any sort of complex return with many different tax forms or sources of income to report, they incurred a charge although the service was marketed to them as “free.”
After coming to an agreement, Intuit must stop engaging in deceptive marketing ploys containing “free, free” ad campaigns that deluded customers with the promise of free tax preparation but then asked them to pay to file, according to an announcement from New York Attorney General Letitia James. This was an agreement signed by all 50 states and the District of Columbia. The idea is to set a precedent moving forward that tax software providers may not create deceiving and false advertising campaigns in the future. So, if you filed using the “free” version of TurboTax, let’s talk about how you’ll get your money back if you actually paid.
How Much You Could Be Owed
Intuit claims no wrongdoing (in this statement) in terms of deceiving its customers within the past year. But, they’ve agreed to settle nonetheless: Intuit will pay $141M in restitution to nearly 4.4 million taxpayers who used TurboTax’s Free Edition during tax years 2016 and 2018.
The good news?
Affected customers will automatically be mailed notices and payment(s) of approximately $30 for each of these two years in which they paid for services with TurboTax.
So, if you fall into this category, be on the lookout for some money coming your way soon!
The Bottom Line
Filing your taxes is an annual obligation for each and every American citizen. This agreement should serve as a warning and reminder to other tax software providers to maintain proper, factual advertising. If you feel more comfortable using different tax software, you could also try H&R Block when you file your taxes next year. It’s not a bad idea to try a different tax software, especially if you can save money!
But in any case, if you’re looking to use “free” tax software, just make sure it’s actually free to file regardless of the complexity of your tax return.