If you’re a taxpayer right here in the United States (and we’re talking about the income tax, actually), then in recent times, you must have heard of the TurboTax lawsuit where they were held liable for making the tax-paying process paid, even though a specific tax bracket didn’t have to pay any of the filing charges. And this wasn’t like some technical glitch or issue or anything like that, it turns out, this was done on purpose. But when the legal case aka lawsuit went on, they agreed to settle the case, and that is why we’re talking about the details of the TurboTax Settlement here. Let’s get to it then.
How TurboTax’s Free Offer Ended Up Not Being Free
See, TurboTax kinda advertised it that the customers, aka taxpayers, can file their taxes for absolutely free, but it turns out that wasn’t the case. When a taxpayer follows the proper procedure on the platform, it is actually only then, at the very end, that they will be asked for a payment. So, where is the free thing? For those who didn’t see the advertisement, they simply went on with it and completed the payment, but they didn’t even know they could choose otherwise or differently. Though the shocking thing was that there were actually a lot of people who were actually and absolutely eligible for the IRS Free File program. But even they were charged.
According to the data, well, it is true that during the 2016 to 2018 period, there were a lot of taxpayers with an income of less than approximately $66,000 who could file their taxes for absolutely free. But it was the TurboTax platform that complicated this thing so much that even the real free version wasn’t known to their customers. Like for example, it was so well hidden, even from search results, that users got to the “Free Edition” of TurboTax, which in most cases was not free.
No doubt, when all of this came to light, there was legal action taken against them, and not just in one or two states, but by all 50 states and Washington, D.C.. But the case went on, and now there is actually a mind-boggling $141 million settlement. So let’s talk about the details of just that.
When Did People Receive The Settlement Money?
Well, if you’re getting to know about all this just now, you should be aware of the fact that payments started to be made in May 2023. Around 4.4 million eligible users were sent money automatically, so in a way, there was no need to fill out any forms or make a claim and that was the best bit about it all. And talking about more specifics here, see, the majority of the recipients got an amount ranging from $29 to $85, which was based on the number of years they were impacted, you know?
In this specific settlement, actually, Rust Consulting was in charge of the distribution, and if you were a good candidate, the payment was just your mail or direct deposit that came between May and October 2023. Plain and simple!
Who Qualified For The Settlement?
You may be a little confused about it, but you were or could have been a part of this settlement if all the following points applied to you, like:
- You paid TurboTax to file your federal taxes in 2016, 2017, or 2018
- Your income qualified for the IRS Free File program in those years
- TurboTax told you that you didn’t qualify for free filing
- You never used Intuit’s actual IRS Free File product before
We’d be straight up here, see, if all of these check for you, then no doubt, you were part of the group that automatically received the share of the settlement. Plain and simple!