Millions of taxpayers who paid to use TurboTax to file their taxes in the past might be eligible for a refund this month. After the tax preparer's owner, Intuit, was found to be wrongfully steering users toward its paid products, it’s now going to pay up.
About $141 million in reimbursement checks are being sent in May to 4.4 million TurboTax users as a result of a massive legal settlement signed last year. But if you’re looking to get a payment, there are a few qualifications you will need.
Why is TurboTax sending out refund checks?
The settlement marks the close of an investigation into the tax filing service prompted by a 2019 ProPublica report that found Intuit was deliberately steering TurboTax users who qualified for free filing toward fee-based products. (Americans under a certain income threshold are eligible to file their federal taxes for free through the IRS Free File program, which TurboTax was part of at the time. It has since left the initiative.)
After the report surfaced, New York Attorney General Letitia James led a multistate investigation into the company, ultimately corroborating the report and accusing Intuit of deceptive marketing practices.
“Intuit aggressively marketed a TurboTax Free Edition that in reality was hardly ever free,” said then-Pennsylvania Attorney General Josh Shapiro in a news release after the coalition reached the $141 million settlement with Intuit in May 2022.
Since the original settlement was brokered with attorneys general from nine states last year, all 50 states and the District of Columbia have signed onto it. On Thursday, several of those attorneys general published news releases with the update that the TurboTax refund checks are now actually being distributed.
Who qualifies for a TurboTax settlement check?
About 4.4 million qualifying Americans will receive payments from Intuit.
Those eligible include taxpayers who filed using TurboTax for tax years 2016, 2017 or 2018, met the income requirements for Free File, and began to file with the free edition before being wrongfully told they were ineligible — and ultimately pushed to pay for services. You must also have not used TurboTax’s IRS Free File in previous years.
The income threshold for IRS Free File eligibility differs by year, and the individual partners can set their own limits. In the timeframe laid out in the settlement, the threshold to use TurboTax's IRS Free File offer was $34,000.
How much is the TurboTax refund?
It depends on how many years each taxpayer was affected. While some Americans are eligible for up to $85 in repayment, James’ office estimates that the average payment will fall between $29 and $30.
How do I get a TurboTax settlement check?
If you are an eligible customer, you won’t have to do anything at all to receive your piece of the settlement from TurboTax. Checks will be mailed out throughout May, so recipients can expect to get theirs between now and early June.
The settlement is being handled by a third party administrator. Eligible customers can expect to receive an email from this administrator regarding their payment size.