TurboTax payments for $141 million settlement to begin next week. Here's who qualifies

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If you’re one of the millions of taxpayers who paid for TurboTax when the filing software should have been free, you may soon receive a settlement check, New York Attorney General Letitia James announced on Thursday.

TurboTax owner Intuit in May 2022 agreed to pay $141 million to lower-income Americans who were “unfairly charged,” according to James, for free tax-filing software as part of a multi-state agreement. Roughly 4.4 million consumers were affected.

A spokesperson for Intuit said the company is “pleased to have reached a resolution with the state attorneys general that will ensure the company can return our focus to providing vital services to American taxpayers today and in the future,” pointing to a blog post published in May 2022. The company admitted to no wrongdoing as part of the agreement.

Who qualifies for a TurboTax settlement payment

You may qualify for the settlement if you used TurboTax for federal returns for tax years 2016, 2017 or 2018, but were eligible for the free version of the software through IRS Free File.

The settlement applies to those who were eligible for Free File and started 2016, 2017 or 2018 federal returns with Intuit’s free software. If you were then told you didn’t qualify for the free software, paid Intuit to complete your return and didn’t use Intuit’s Free File product in a previous year, you may receive a payment, according to the settlement website.

Taxpayers qualified for Free File for 2022 with an adjusted gross income of $73,000, but the threshold was $64,000 for tax year 2016, according to the Free File Alliance.

How much money to expect, and when

If you’re one of those consumers eligible for a payment, you can expect to hear from Rust Consulting, the settlement fund administrator, by email, and checks will start being sent next week. There is no action required by those affected.

While most eligible consumers are expected to receive about $30, you may get up to $85 if you used TurboTax for the three consecutive years named.

Although payments begin in May, some checks won’t reach consumers until early June, depending on the mailing date, according to the settlement website. However, if you don’t receive the funds by mid-June, you can request a reissue through the website with your claimant ID issued by email.

Filers wronged by ‘predatory’ marketing

“TurboTax’s predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes,” James said in a statement. “Today we are righting that wrong and putting money back into the pockets of hardworking taxpayers who should have never paid to file their taxes.”

While roughly 70% of taxpayers qualify for Free File, only 2% used it during the 2022 filing season, according to the National Taxpayer Advocate’s annual report to Congress.

This article was originally published by Cnbc.com. Read the original article here.