What to Know About the TaxAct Class Action Settlement

By Kelley R. Taylor, Kiplinger Consumer News Service (TNS)

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.

Here’s what else you should know.

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. 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.

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