NEW YORK (WJW) — More than 170,000 Ohioans who have used TurboTax to file their taxes for “free” are eligible for a refund.
New York Attorney General Letitia James on Thursday announced Intuit, the owner of the online tax preparing service, has agreed to pay $141 million in restitution to American taxpayers in all 50 states, for deceiving customers into paying for tax services it claimed were free.
“Intuit cheated millions of low-income Americans out of free tax filing services they were entitled to,” James is quoted in a news release. “For years, Intuit misled the most vulnerable among us to make a profit. Today, every state in the nation is holding Intuit accountable for scamming millions of taxpayers, and we’re putting millions of dollars back into the pockets of impacted Americans. This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal.”
About 4.4 million Americans who used TurboTax’s Free Edition to file their taxes for tax years 2016 through 2018 could receive a direct payment of about $30 for each tax year they filed. Those folks can expect to get a notice, then a check, by mail.
More than $5.3 million from that settlement is headed to more than 174,000 affected Ohioans, according to Ohio Attorney General Dave Yost’s office.
Right now eligible consumers are being emailed by the settlement fund administrator, Rust Consulting. Ohioans could start getting the checks as early as Monday, according to Yost’s office. All checks are expected to be mailed by the end of May.
“The checks are in the mail — or will be soon,” Yost is quoted in a Friday news release. “I’m beyond thrilled that cheated Ohioans will see money go back into their pockets after Intuit’s shameless scheme.”
Intuit was also ordered to suspend its “free, free, free” ad campaign for its “freemium” tax filing product — in which the word would be repeated dozens of times in a 30-second spot, despite it only actually being free for about a third of U.S. taxpayers.
Intuit began participating in the IRS Free File program, which lets low-income earners and military servicemembers to file their taxes for free. To get Intuit on board, the IRS agreed not to compete with the company by offering its own free electronic tax preparation and filing service.
But state investigators found Intuit acted deceptively and unfairly by similarly naming its so-called “freemium” product and by paying for search advertisements or otherwise manipulating internet search traffic to divert taxpayers looking for IRS Free File to TurboTax’s paid product. Intuit withdrew from the Free File program in 2021.
Under the agreement, Intuit also agreed to reform its business practices relating to misrepresentations and disclosures in marketing free products.
For more information on the settlement and your eligibility, visit AGTurboTaxsettlement.com.