Minnesotans will see $1.8 million in payouts from TurboTax settlement

Minnesotans will receive $1.8 million in refunds after TurboTax steered them away from its free tax services and had them pay instead, Attorney General Keith Ellison announced Thursday.

The money is part of a settlement between Intuit Inc., the owner of TurboTax, and all 50 states and Washington D.C., which had sued the tax planning provider. In total, Intuit will refund users $141 million.

TurboTax, which partners with the IRS, promises free tax services to low-income taxpayers. But an investigation by the states involved in the settlement found that TurboTax advertised its “free edition” to qualifying taxpayers, despite directing them to its paid version through advertising and search engine results.

And a 2019 report from ProPublica found that TurboTax lured taxpayers seeking free services into paying more than $200 in some cases.

In a statement to CNN, Intuit said it "admitted no wrongdoing" in the settlement. 

Up to 60,000 low-income Minnesotans who used TurboTax between 2016 and 2018 will be eligible for refunds in the settlement.

Payments are expected to be around $30 for each year they paid for services they expected to be free.

“Part of my job of helping Minnesotans afford their lives is protecting them from predatory corporations,” Ellison said in a statement.

“I joined this investigation and settlement because Intuit’s business practices defrauded Minnesotans. The settlement we’ve reached will put money back in the pockets of low-income consumers that Intuit deceived into paying for tax-preparation services that should have been free.”