TurboTax users will get up to $85 each in settlement over free filing deception

At least 4.4 million TurboTax users are getting a refund this month under a $141 million multistate settlement with parent company Intuit.

In California, an estimated 370,000 low-income TurboTax users will share about $11.4 million from the settlement.

New York’s Attorney General Letitia James said Thursday that eligible TurboTax users will get an email about their settlement and checks should arrive throughout May.

A year ago Saturday, Mountain View-based Intuit agreed to pay millions for tricking millions of low-income tax filers into paying for services that should have been free.

All 50 states and the District of Columbia signed the agreement. An investigation into Intuit’s practices determined the company used several deceptive and unfair practices, limiting tax filers’ participation in the IRS Free File Program. According to the Office of the Attorney General, the company used “confusingly similar names for both its IRS Free File product and its commercial “freemium” product.”

Intuit also used paid search advertisements to redirect consumers who were looking for the IRS Free File service to the TurboTax “freemium” product.

The company withdrew from the IRS Free File program in July 2021.

“TurboTax’s predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes,” James said in a statement. “Today we are righting that wrong and putting money back into the pockets of hardworking taxpayers who should have never paid to file their taxes. I thank my fellow attorneys general for their partnership in this effort to stand up for ordinary Americans and hold companies who cheat consumers accountable.”