A growing number of TurboTax customers in Ontario are facing unexpected bills from the Canada Revenue Agency (CRA) after audits revealed that they were granted financial credits to which they weren’t entitled. The situation has left many users frustrated and questioning the reliability of the popular tax preparation software.
Cheryl Wong, a teacher from Markham, was one of the surprised recipients of a hefty bill. "We now owed $10,000. (Of that), $8,000 was a credit I received that shouldn’t have been paid, and $2,000 in interest,” she told Global News. This shocking revelation was echoed by Michael Ribeiro, a resident of Mississauga, who also received a bill for credits he shouldn’t have received, along with a strict 21-day payment deadline to avoid further interest charges.
“It was a very unfortunate surprise the day we got the three letters from the CRA,” Ribeiro said. Tim O’Shea, another long-time TurboTax customer from Oakville, described his experience as “A very big surprise — a nasty surprise, I dare say.” They are just a few among many TurboTax users who have contacted Global News, expressing their frustration with the American company that owns and markets the software.
The core of the issue lies in how TurboTax calculated eligibility for the Ontario Child Tax Care Credit, also known as the Ontario Access and Relief from Expenses (CARE) tax credit, which was implemented during the COVID-19 pandemic. The program allows eligible families to claim up to 75 percent of their eligible child care expenses, including services provided by child-care centers, homes, and camps. However, households earning more than $150,000 per year do not qualify for these credits.
Jordan Cera, one of the affected users, reported that TurboTax incorrectly defaulted to calculating child care expense credits based solely on the income of the lower-earning spouse when preparing joint tax returns. Despite filling out the software honestly and accurately, many users are now facing unexpected tax bills.
“Despite numerous attempts by impacted users to engage with TurboTax and seek resolution, we have encountered persistent roadblocks, vague responses, and an overall lack of accountability,” Cera stated in an email to Global News. None of the tax filers interviewed blamed the CRA for the reassessment; they all pointed their fingers at TurboTax, owned by Intuit, based in Mountain View, California.
For O’Shea, who prepares tax returns for several family members, including his daughter who was reassessed for three years of returns and now owes more than $17,000 for disallowed credits and interest, the resolution seems straightforward. “My expectation was that Intuit, once they investigated, would see that they had made a mistake,” he said.
Diana Martins, another TurboTax customer, faced a similar fate. She was reassessed for the 2021, 2022, and 2023 tax years and was demanded to pay over $21,000, including credits, penalties, and interest. The Pickering couple, who pays over $12,000 for child care annually, had to dip into their education savings to repay what was owed. “We want TurboTax to take accountability for the fact that they have put thousands of families with children out like this,” Martins said.
Global News reached out to the CRA to inquire about the number of TurboTax customers in Ontario who have been audited specifically due to the child care credit program, but they did not immediately provide an answer. A Facebook group consisting of more than 100 TurboTax customers has been sharing similar stories about their experiences.
In response to the growing concerns, Intuit has denied any responsibility for the audits affecting Ontario TurboTax customers. “We are aware of customer feedback regarding the Ontario Childcare Access and Relief from Expenses form,” stated a TurboTax spokesperson in an email to Global News. They emphasized that their product is calculating the tax credit correctly, stating, "The accurate calculation of this credit relies on user inputs as per CRA requirements.”
TurboTax also highlighted that there are two modes in the software, one of which features a review portion that some users may be declining, leading to the software relying on their inputs to apply credits they may not be eligible for. However, this explanation has not satisfied many TurboTax customers. “Software is software is software,” O’Shea remarked. “It should arrive at the same answer.”
TurboTax markets itself as providing guaranteed calculations, claiming that it will stand behind its accuracy. “We guarantee our calculations are 100 percent accurate,” reads the guarantee on its website. “If you pay a penalty because of a TurboTax calculation error, we’ll reimburse you the penalty and interest.” However, this guarantee does not cover calculation errors due to errors in CRA tables.
In 2022, Intuit faced scrutiny over its marketing practices and agreed to pay $141 million in restitution following a New York State investigation into a misleading ad campaign, although they did not admit any wrongdoing in settling that action. “They’re just not taking accountability,” Martins said, noting she has been using TurboTax for 16 years without issue until now. She believes the company should honor its guarantee and repay affected customers for penalties and interest.
For O’Shea, who has corresponded with Intuit’s senior management to make a case for compensation, the company was unwilling to offer anything except a refund for the cost of the software purchased over three years, which he deemed insufficient. “They’re battening down the hatches because if they pay one person like me, they’ll have to pay everybody,” he concluded.
This ongoing saga raises questions about the reliability of tax software and the responsibilities of companies like Intuit when their products lead to financial repercussions for consumers. As the tax season progresses, many Ontario families are left to grapple with unexpected bills and a sense of betrayal from a software they trusted to handle their financial obligations.
