A class action settlement involving the popular online tax preparation service, TaxAct, is underway. This legal settlement involves users of TaxAct's online federal tax filing service between two and six years ago.
The total settlement amount is about $14.95 million, and eligible customers may be entitled to compensation.
But the deadline for claims is fast approaching. So, here’s what else you should know.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
TaxAct lawsuit?
The lawsuit at the center of this settlement alleges that TaxAct shared users' personal and financial information with third-party entities, specifically Google and Meta (formerly Facebook), without obtaining proper consent.
Tracking pixels were allegedly used to collect and transmit user data for advertising. That included names, email addresses, income data, and other sensitive data entered during the tax filing process
TaxAct has agreed to settle but has not admitted wrongdoing.
TaxAct class settlement: How much is it?
The settlement applies to those who used TaxAct‘s online do-it-yourself 1040 tax filing product between Jan. 1, 2018, and Dec. 31, 2022.
- The official settlement website indicates the estimated individual payout for eligible claimants in the TaxAct settlement is approximately $18.65.
- California residents and joint filers may qualify for slightly higher amounts.
- Additionally, claimants planning to use TaxAct for their 2024 tax returns will receive complimentary expert assistance as part of the settlement.
You must meet the eligibility criteria and submit a claim form to participate. Eligibility is generally extended to those who used TaxAct's online service and had a U.S. postal code during the time covered by the settlement.
Claim forms can be submitted online through the official settlement website. Proof of purchase is not required.
Key dates:
- The deadline for submitting claims is Sept. 11, 2024.
- Those wishing to opt out of the settlement must do so by Sept. 11, 2024.
- Objections to the settlement must be filed by Aug. 12, 2024.
If you have questions about the settlement, contact the Settlement Administrator, Kroll Settlement Administration.
Email: info@TaxActClassSettlement.com and Toll-Free: (833) 425-9910. You can also contact the administrator by mail at the following address.
Smith-Washington v. TaxAct, Inc., c/o Kroll Settlement Administration LLC
PO Box 225391
New York, NY 10150-5391
TaxAct legal settlement: Bottom line
The settlement is part of a broader trend of privacy and fair advertising concerns in the tax prep industry. As Kiplinger reported, The Federal Trade Commission (FTC) recently filed complaints against Intuit TurboTax and H&R Block, accusing the companies of misleading consumers with advertising for their digital tax filing products.
While the individual payouts for the TaxAct settlement will likely be small, the situation is a reminder to remain vigilant about how companies use and share data we provide for online financial services.
Related
-
What You Will Pay for Medicare in 2026Medicare premiums for 2026, as well as the costs of Parts A, B, and D, have increased. Here is how much you'll pay in 2026.
-
Shoppers Hit the Brakes on EVs After Tax Credits ExpireThe Letter Electric cars are here to stay, but they'll have to compete harder to get shoppers interested without the federal tax credit.
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
-
An HSA Sounds Great for Taxes: Here’s Why It Might Not Be Right for YouHealth Savings Even with the promise of ‘triple tax benefits,’ a health savings account might not be the best health plan option for everyone.
-
New RMD Rules: Can You Pass This Retirement Distributions Tax Quiz?Quiz Take our RMD quiz to test your retirement tax knowledge. Learn about RMD rules, IRS deadlines, and tax penalties that could shrink your savings.
-
Ten Retirement Tax Plan Moves to Make Before December 31Retirement Taxes Proactively reviewing your health coverage, RMDs, and IRAs can lower retirement taxes in 2025 and 2026. Here’s how.
-
When to Hire a Tax Pro: The Age Most Americans Switch to a CPATax Tips Taxpayers may outsource their financial stress by a specific age. Find out when you should hire a tax preparer.
-
The Original Property Tax Hack: Avoiding The ‘Window Tax’Property Taxes Here’s how homeowners can challenge their home assessment and potentially reduce their property taxes — with a little lesson from history.
-
Social Security Tax Limit Rises Again: Who Pays More in 2026?Payroll Taxes The Social Security Administration has announced significant changes affecting millions as we approach a new year.
-
Three Critical Tax Changes Could Boost Your Paycheck in 2026Tax Tips The IRS predicts these tax breaks may change take-home pay in 2026. Will you get over $1,000 in tax savings?
