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TurboTax lied about free tax filing and could owe you money

The company will pay out a total of $141 million.

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Image: KnowTechie

Intuit, the company behind the popular internet tax filing website, TurboTax, has agreed to pay $141 million for tricking users into paying for tax filing that was heavily disguised as free.

New York Attorney General Letitia James was the leader behind a multistate agreement with the company. James says, “Intuit cheated millions of low-income Americans out of free tax filing services they were entitled to.”

The agreement says Intuit will owe customers $30 for each year from 2016 to 2018 the company tricked them into paying for tax filing that should have been free. If you make the cut, you should see a notice or a check in the mail soon.

The problem lies in Intuit’s deceptive marketing schemes. TurboTax used to put the “Free” tag on two different filing options, though one of the options is only free sometimes.

TurboTax Free is the standard version of TurboTax that starts out as free. But around 4.5 million people ended up having to pay for the “Free” service because their returns are “too complex.”

The option that most users should have chosen was TurboTax Free File. Free File was part of an agreement between TurboTax and the government to offer free tax filing to Americans.

However, TurboTax intentionally hid this option deep within its website so most users ended up going with TurboTax Free instead. The company has since ended the agreement, but not until it had been tricking customers for three years.

READ MORE: How to get your piece of the $141 million TurboTax settlement

In addition to owing $141 million, the company agreed to stop misrepresenting its products, improve its advertisements, and make it more clear whether a user is eligible for free filing.

This is a good outcome that should put a little cash back into deserving Americans’ pockets. But more importantly, the advertising changes will, hopefully, make a difference. TurboTax uses the word “Free” an awful lot in its ads, so it’ll be nice to see the company better represent its products.

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