State Attorney General Keith Ellison announced Thursday that Minnesotans will stake up to $1.8 million in refunds as a result of a legal agreement with the maker of tax filing software TurboTax.
Ellison’s office said in a news release that 60,000 state residents would be eligible for a refund after software maker Intuit Inc. wrongly advertised its software as free. As part of a $141 million settlement with all 50 states and Washington, DC, the company must pay damages to millions of customers and stop deceptive advertising.
“Part of my job in helping Minnesotans afford their lives is protecting them from predatory corporations. I became involved in this investigation and settlement because Intuit’s business practices betrayed Minnesotans,” Ellison said in his release. said. “The agreement we reached will put money back in the pockets of low-income consumers, whom Intuit duped into paying for tax-preparation services that should have been free.”
According to Ellison’s office, Intuit had a long-standing partnership with the Internal Revenue Service where it was required to provide a free tax filing program for low-income filers. Under the agreement, the IRS said it would not create a free program of its own and compete with Intuit or other tax service providers.
The release said that the software “TurboTex Free Edition” was free for only about a third of US customers, and did not disclose enough of it.
The settlement agreement calls for customers who used the free version of TurboTax for the 2016 to 2018 tax year. Users charged a fee, despite being told that the service was free, they would receive about $30 each year they filed and paid the fee. Eligible Minnesotans will receive at least a partial refund. Affected customers will receive a refund notice and a check by mail.
As part of the settlement, Intuit will also end its “get it free” advertising campaign and be more transparent about any fees it incurs while using its software.