TurboTax developer Intuit announced that it’s leaving the IRS Free File program, which allows many Americans to receive assistance with filing their federal taxes at no cost.
Free File lets people who make less than $72,000 per year file their federal taxes “on an IRS partner site” for free; those who make more than $72,000 have to fill out the forms themselves. The list of IRS partners that participate in the program includes the likes of TaxSlayer, 1040Now, and other organizations that specialize in helping people file their taxes with minimal expense.
But that list will no longer include TurboTax after the current tax season ends in October. (The IRS extended the 2020 tax season to Oct. 15 because of the pandemic.) Intuit positioned its departure from the program as a net positive for US taxpayers, citing the proliferation of free tax prep options, though it appears to have been prompted by IRS regulations.
“With the Free File program surpassing its founding goals of e-file and free tax preparation, and due to the limitations of the Free File program and conflicting demands from those outside the program,” Intuit says, “we are not able to continue in the program and deliver all of the benefits that can help consumers make more money, save more, and invest for the future.”
In our review, we found that Intuit TurboTax 2021 (Tax Year 2020) offers thorough explorations of tax forms and schedules and an outstanding user experience. Though it’s more expensive than the competition, “it’s worth it,” we concluded, awarding it an Editors’ Choice award.
Still, as ProPublica discovered in 2019, Intuit previously hid the TurboTax page related to the Free File program from search engines, and pushed many Americans to use paid versions of the tax software. At one point, the company even issued refunds to customers who specifically mentioned ProPublica’s reporting on the matter.
The issue prompted a lawsuit, which is ongoing. “Tens of thousands of TurboTax customers are seeking to use arbitration, an alternative to a lawsuit, to pursue claims that they paid for a service that should have been free. Intuit has denied wrongdoing,” ProPublica says.
Intuit says it’s “committed to continuing to offer free tax preparation while accelerating innovation to address all of consumers’ financial problems” even after it drops Free File.
As Mashable notes, H&R Block said last year that it too would leave the Free File program.
