Millions of low-income Americans will be compensated for being unfairly charged for services that should have been free after a multistate agreement was announced.
The company agreed to reform its practices. It must suspend an advertising campaign that promised free tax preparation but then asked customers to pay, according to an announcement from New York Attorney General Letitia James.
The agreement has been signed by all 50 states.
More than four million consumers used the free edition of the TurboTax. According to the announcement, these customers were told that they had to pay for the service even though they were eligible to file for free.
The announcement said that consumers would get $30 for each year they paid for services. Notices and a check will be sent to consumers.
A person from the company didn't return a request for comment.
James said that Intuit cheated millions of low-income Americans out of free tax filing services. We are putting millions of dollars back into the pockets of impacted Americans because every state is holding Intuit accountable for scamming millions of taxpayers.
The Education Department forgives loans of more than 100,000 people in public service.
The two free versions of TurboTax were discontinued recently. The IRS Free File Program allows low-income Americans to file their taxes for free. In July 2021, Intuit ended its participation. According to an earlier complaint from the Federal Trade Commission, it was available to taxpayers with an income below $39,000.
The TurboTax Free Edition is only free for taxpayers with simple returns, according to the announcement. A paid version of the tax service is required for users without a simple return.
A simple return is one that can be filed on a Form 1040 with limited attached schedules, like one that includes student-loan interest paid, according to the FTC.
The IRS Free File products are free for 70% of taxpayers, according to the announcement.
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