TaxAct Data Sharing Settlement: $17.45M

• Nationwide Class: Individuals in the United States who personally used TaxAct's online do-it-yourself Form 1040 product to file their tax returns between January 1, 2018, and December 31, 2022.

• Nationwide Married Filing Jointly Class: Individuals in the United States who filed joint tax returns using TaxAct's online do-it-yourself Form 1040 product between January 1, 2018, and December 31, 2022, where their spouse was the primary user of the product.

• California Subclass: Individuals residing in California who meet the criteria for either the Nationwide Class or the Nationwide Married Filing Jointly Class.

Important Note: Members of either class must not have filed a demand for arbitration to be eligible.

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TaxAct, a popular online tax preparation service, has reached a settlement of $14.95 million to resolve a class action lawsuit alleging violations of user privacy. The lawsuit centered on claims that TaxAct shared personal and financial information with third-party companies, such as Facebook (now Meta Platforms) and Google, without users' permission.

The lawsuit alleged that this data sharing practice occurred between January 1, 2018, and December 31, 2022, and impacted users who filed tax returns using TaxAct's online do-it-yourself Form 1040 product during that period. Plaintiffs argued that TaxAct's practices violated federal and California state privacy laws. They contended that TaxAct improperly accessed and disclosed sensitive data users entered while filing their taxes, such as income, Social Security numbers, and investment holdings. This alleged data sharing could have exposed users to targeted advertising or even identity theft.

TaxAct maintains they did nothing wrong, but agreed to the settlement to avoid the costs and uncertainties of a protracted legal battle.

The settlement fund of $14.95 million will be distributed among eligible class members. The exact amount each person receives will depend on the total number of claims filed. However, most class members can expect a cash payment of around $18.65. California residents and those who filed joint tax returns may be eligible for larger payouts in recognition of potentially greater privacy risks.

In addition to the cash benefit, there is an incentive for those who choose to use TaxAct again. Anyone who uses TaxAct to file their 2024 tax return will receive complimentary Xpert Assist, a service that provides tax preparation assistance. This benefit could be particularly appealing to users who may have felt discouraged from using TaxAct due to the privacy concerns raised in the lawsuit.

To receive a settlement payment, class members must submit a valid claim form by September 11, 2024.