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If you’ve been following tax news lately, you may have noticed that Intuit, the creator of TurboTax, has gotten into some hot water. Not only are customers starting to complain that they have to pay for services that the IRS can easily offer for free (all tax software companies are getting nervous about that idea), but there are also more serious charges.
In March 2022, for example, the FTC (Federal Trade Commission) filed a lawsuit against Intuit for deceptive ads about TurboTax that claimed its products offered “free” tax filing. If you used TurboTax this year or in the past, you may have discovered that the free filing option isn’t nearly as free as it sounds. Intuit created a list of people who couldn’t technically use its TurboTax Free edition for free, including freelancers and gig workers, and those who earned farm income (these exceptions were apparently unnecessary, except as a way to earn more profit). Further, the FTC claimed that Intuit went as far as blocking its own IRS Free File landing webpage, so customers couldn’t learn more about the option.
In other words, this seemed like a pretty easy case for the FTC to press. Intuit agreed. Only a few months later, Intuit reached a $141 million settlement with the FTC in an effort to make the whole thing disappear. That $141 million isn’t going to the FTC – it’s going to TurboTax users around the country.
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Do I Qualify for Some TurboTax Settlement Money?
Around 4.4 million people are estimated to be affected by this lawsuit, spread throughout all 50 states. Here are the most important parts of qualifying for it:
- You used the TurboTax Free Edition between 2016 and 2018 (unfortunately, the settlement did not extend to later years, although according to the FTC, Intuit’s practices did).
- You paid for filing, even though you were using the Free Edition.
- You qualified for the IRS Free File program during this time. The Free File program was available to both individuals and families with an adjusted gross income of less than $73,000, as well as any members of the military.
- If all of these apply to you, you’re likely to qualify to get a piece of the settlement.
What Do I Need to Do?
That’s the easy part – you don’t need to apply for anything. Settlements like this will automatically contact anyone that the IRS says is eligible to receive payment. Of course, this also takes a lot of time, so it may be a year or two before you are contacted.
How Much Would I Get?
Ultimately, if you qualify you can expect a direct payment. It’s expected to be around $30 for each year you could have used the Free File program. By then, that may be enough to grab an extra coffee or beer on the weekend, or possibly fill up a fifth of your gas tank.