Ohio and PA included in $141 million TurboTax settlement
Ohio and Pennsylvania have been included in a $141 million settlement with Intuit Inc., the makers of TurboTax.
The multistate settlement is the result of an investigation that discovered in 2016 through 2018, Intuit tricked consumers into paying for TurboTax products that were actually available for free.
A statement from Ohio Attorney General Dave Yost says that the deception occurred when Intuit used digital tactics to take advantage of low-income consumers:
"Intuit previously offered two free versions of TurboTax. One was available through the IRS Free File Program, a public-private partnership with the Internal Revenue Service that allows members of the military and taxpayers earning $34,000 or less (a limit imposed by Intuit) to file their taxes free.
The company also offered, and continues to offer, a commercial product called TurboTax Free Edition, which is only free for taxpayers with "simple returns" as defined by Intuit. In recent years, TurboTax has aggressively marketed this "freemium" product, notably through ad campaigns in which "free" was the most prominent - or, sometimes, the only - selling point, but the company failed to adequately disclose eligibility requirements to consumers."
Ohio's portion of the funds will be distributed directly to 163,367 eligible Ohioans.
"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."
An estimated 158,000 Pennsylvanians used TurboTax's Free Edition in 2016 through 2018, and were told they had to pay to file even though they were eligible to file for free. Under the settlement they will receive restitution.
"Intuit aggressively marketed a TurboTax Free Edition that in reality was hardly ever free," said PA Attorney General Josh Shapiro. "They bid on paid search ads to drive consumers to their 'freemium product' and purposefully blocked their IRS-partnered Free File landing page from search engine results during the peak of Tax Year 2018, leading to many Pennsylvanians who could have filed for free having to pay to file instead."
Those who qualify are expected to receive a direct payment of approximately $30 for each year they were misled into paying for filing services. Impacted consumers will automatically receive notices and a check by mail.
Intuit has also agreed to reform its business practices as part of the settlement.