TurboTax charges users a hidden “refund transfer fee”

TurboTax is charging users hidden fees to process their tax returns. Customers complain that TurboTax has begun charging an extra $40 hidden fee in addition to the advertised $39 processing fee and other preparation and filing fees. One customer reports

“Yah this is crazy, it’s a $40 hidden fee. I agreed to the $39.00 fee and the $79 to file my taxes (federal and state for the $79) but this $40 is well hidden.”

TurboTax explains that if a customer chooses to pay their TurboTax fees with their refund, they incur a “refund transfer fee.” This option is also known as the “refund processing service,” which allows e-filing customers to pay their TurboTax fee by having it be deducted from their federal tax refund instead of paying with a credit or debit card before their refund is processed. Use of the service is not required for a customer to e-file and process a tax refund and does not affect the refund’s speed.

TurboTax’s help page says there “may be” a fee for the service, depending on the customer’s situation and which add-ons they choose. If there is a fee, TurboTax displays it when the customer “get[s] ready to file.”

The page displaying the fee information gives the user the choice to pay with a credit card or pay with their federal refund. Below the federal refund option, it says, “Don’t worry about pulling out your wallet. We’ll simply deduct the $39.99 fee from your federal refund and send the balance to your bank account.” As the user who posted this page notes, the extra fee is mentioned, but “it is not crystal clear.”

DoorDash, AT&T, and Safeway have been subject to similar class actions alleging hidden fees.  

Turbotax is currently facing a mass arbitration action for tricking customers into paying to file their taxes when they could have filed their taxes for free under the IRS’s free file program.  

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