COLUMBUS, Ohio (WCMH) — Ohioans who were charged certain fees while using TurboTax could soon receive a payout after a recent settlement.
Ohio Attorney General Dave Yost announced Wednesday that Ohio will receive $5 million of $141 million Intuit Inc., the parent company of the TurboTax software, agreed to pay all 50 states and the District of Columbia in restitution to consumers who paid for tax services that should have been free.
“Intuit’s scheme to make a buck by tricking responsible Ohio taxpayers is unacceptable,” Yost said. “We are holding Intuit accountable and putting money back into consumers’ pockets.”
The agreement came after an investigation into Intuit’s tactics of advertising its paid products as a free service. However, the TurboTax Free Edition, was only free for taxpayers with “simple returns” as defined by Intuit.
A release from Yost’s office reads:
The multistate investigation found that Intuit engaged in several deceptive and unfair trade practices that limited consumers’ participation in the IRS program and that the company was aware of consumers’ confusion about the product names.
Additionally, Intuit bid on paid search advertisements to direct consumers who were looking for the IRS Free File product to the TurboTax “freemium” product instead. Intuit also deliberately blocked its IRS Free File landing page from search engine results during the 2018 tax-filing season, effectively shutting out eligible taxpayers from filing their taxes for free.
Moreover, TurboTax’s website included a “Products and Pricing” page that stated it would “recommend the right tax solution” but never displayed or recommended the IRS Free File program.
The restitution will be given to consumers who used the TurboTax Free Edition for tax years 2016 through 2018 and were told they had to pay despite being eligible for the IRS Free File Program.
Ohio’s portion will be distributed directly to 163,367 eligible state residents. That’s about $30 per Ohioan who was deceived, according to Yost’s office.
Consumers will be notified and sent a check by mail. On average, eligible Ohioans paid about $52 annually to Intuit to file federal returns.
Intuit agreed to reform its business practices to better inform users, as part of the settlement, and permanently withdrew from the Free File program in July 2021.