TurboTax customers signed up for their service with the idea that they’d be getting free tax-preparation services. They didn’t, and now TurboTax has to pay up in a settlement.
The attorneys general of all 50 states announced on May 4, 2022, that they’ve settled the lawsuit with TurboTax, and now TurboTax has to pay $141 million.
So, do you qualify for the settlement money? How much do you get, and how do you get it? Here’s what you need to know.
If you earned less than $34,000, you might be eligible for a TurboTax settlement.
The 4.4 million taxpayers who will split the settlement money are lower-income earners who were eligible for TurboTax Free Edition but were told they had to pay to file instead.
TurboTax Free Edition was offered as part of the IRS’s Free File program, which offers free guided tax preparation for taxpayers who earn roughly $34,000 and members of the military.
Eligible taxpayers will get up to $85.
The settlement awards taxpayers who filed during the 2016, 2017 and 2018 tax years, and the payment amount will vary based on the number of years you are eligible for.
If you qualify for compensation for all three tax years, you will receive the maximum amount of $85. However, if you only qualify for one tax year, you will receive a smaller payment of $29.
If you qualify, your payment will come automatically in May 2023.
You don’t have to do anything to get this money — no filing a claim or anything like that. TurboTax knows which customers are included in the settlement group, and those customers will receive notices and checks by mail — to the addresses they associated with their TurboTax accounts.
Eligible consumers will receive mailed checks starting the week of May 15, and will be distributed throughout the month.