Keystone Today

Attorney General Josh Shapiro recently announced that approximately 158,000 Pennsylvanians will receive restitution through a settlement with Intuit Inc., as they were deceived into paying for TurboTax products that were supposed to be free.

According to a May 4 news release, the attorney general’s office secured a settlement that is part of an agreement following an investigation into the company. It found that through the company's “aggressive and deceptive marketing,” consumers were tricked, not only across the state, but across the country. Intuit has agreed to pay $141 million, and after administrative costs, money will be returned to low-income consumers that were victimized across the nation.

“Intuit aggressively marketed a TurboTax Free Edition that in reality was hardly ever free,” AG Shapiro said. “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. Thanks to our settlement, Intuit won’t be able to engage in this kind of behavior again. Pennsylvania consumers deserve to know all of their tax filing options so they can make the best choice for themselves and their families.”

The release said that repeatedly over the years, Intuit offered a free version of its product through the IRS Free File Program, which was a public-private partnership with the IRS for free tax filing for the military and taxpayers who make $34,000 or less. This, however, ended in July 2021. The free edition was only free for taxpayers with “simple returns” as well. The “freemium” product was free for about a third of taxpayers while the IRS Free File product was free for 70%, according to the release.

The investigation found that Intuit was involved in unfair trade practices that limited consumer participation in the IRS Free File Program. It was also deceptive in using similar names to trick customers.

The settlement said that 158,000 residents of Pennsylvania who used the TurboTax Free Edition from 2016 to 2018 were told they had to pay to file even though they should have been able to do so for free. Many consumers didn’t learn that they would have to pay to file until after they’d spent time and effort inputting their tax information into TurboTax. This included consumers who were eligible for Intuit’s IRS Free File product. 

As a result of the settlement, these Pennsylvania residents are expected to receive $30 for each year they were misled. Notices and checks will be issued via the mail. 

Through the settlement, Intuit must also make reforms to its business practices. The company will refrain from making misrepresentations through promotions; enhance disclosure in advertising and marketing of free products; and refrain from having consumers start filing over if they exit a paid product to use a free product.