Subscribe for 50% off

TurboTax Owner Intuit to Pay Giant Settlement After Allegedly Scamming Millions. Do You Qualify for the Cash?

The company will pay restitution to almost 4.4 million taxpayers.


Following a lawsuit brought by the Federal Trade Commission over its "free" tax-filing software that actually comes with some costly caveats, TurboTax owner Intuit has agreed to pay a $141 million settlement to customers across the U.S., New York's attorney general announced Wednesday.

According to New York Attorney General Letitia James, Intuit Inc. will suspend its "free, free, free" advertising campaign, which allegedly hit taxpayers with unexpected fees when it was time to file, and pay restitution to almost 4.4 million taxpayers. James' investigation found that misleading tactics led some low-income taxpayers to forego the federally supported services for which they qualified in favor of TurboTax's commerical offering.

Related: Tax Day 2022: Deadlines and All Your Questions Answered

"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," James said. "This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal."

Representatives for Intuit published a blog post addressing the matter on Wednesday, saying, "As part of the agreement, Intuit admitted no wrongdoing, agreed to pay $141 million to put this matter behind it, and made certain commitments regarding its advertising practices. Intuit already adheres to most of these advertising practices and expects minimal impact to its business from implementing the remaining changes going forward."

Related: These Are the Most Common Tax Filing Mistakes for Entrepreneurs — and How You Can Avoid Them

Until last year, TurboTax offered two "free" options: one available to taxpayers earning approximately $34,000 or members of the military in collaboration with the Internal Revenue Service's Free File program, and a commerical product for taxpayers with "simple returns," as outlined by the company.

Per the agreement's terms, Intuit will pay restitution to customers who began using the commerical TurboTax Free Edition for tax years 2016 through 2018 and were told that they had to pay to file despite being eligible for the version of TurboTax offered in partnership with the IRS Free File program.

Intuit Inc. was down nearly 6% today as of 10:10 a.m. ET.

Entrepreneur Editors' Picks