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TurboTax Customers in Ontario Face Unexpected Tax Bills
A growing number of Ontario residents who used TurboTax for tax preparation are now receiving surprising tax bills from the Canada Revenue Agency (CRA). This situation arises after audits revealed that many were granted financial credits improperly, leading to unexpected financial consequences.
Cheryl Wong, a teacher living in Markham, expressed her shock upon receiving a bill indicating she owed a total of $10,000. “Of that, $8,000 was a credit I received that shouldn’t have been paid, and $2,000 in interest,” she explained.
Similarly, Michael Ribeiro from Mississauga found himself in a comparable predicament when the CRA informed him of undeserved credits. He was given just 21 days to settle his debts or face further interest charges. “It was a very unfortunate surprise the day we got the three letters from the CRA,” Ribeiro remarked, noting his long-time use of TurboTax.
The pattern continues with Oakville resident Tim O’Shea, who shared his dismay at the unexpected demand for payment. “A very big surprise — a nasty surprise, I dare say,” he stated. All of them belong to a cohort of TurboTax users disillusioned with the software’s handling of tax calculations.
The issue centers around the calculation of eligibility for the Ontario Child Tax Care Credit, known as the Ontario Access and Relief from Expenses (CARE) tax credit, which was established during the COVID-19 pandemic. Under this program, families can claim up to 75% of their qualifying child care expenses, which encompass costs from daycare centers, family care, and summer camps.
Despite participants’ assertions that they used the software correctly and provided accurate information, they are now burdened with hefty tax bills. Affected user Jordan Cera noted a significant flaw: “When preparing joint tax returns, the program incorrectly defaulted to calculating child care expense credits based solely on the income of the lower-earning spouse.”
Importantly, families with annual earnings exceeding $150,000 are ineligible for these credits.
Attempts to engage TurboTax for resolution have left customers feeling frustrated. Cera described the experience as riddled with “persistent roadblocks, vague responses, and an overall lack of accountability” from the company. None of the individuals interviewed placed the blame on the CRA; responsibility appears to lie squarely with TurboTax, which is developed by Intuit, based in California.
O’Shea, who prepares tax returns for multiple family members, emphasized the need for accountability. After being reassessed for three years and facing a bill exceeding $17,000, he expected Intuit to recognize its error. “My expectation was that Intuit, once they investigated, would see that they had made a mistake,” he shared.
Diana Martins, another TurboTax user, reported a reassessment for the years 2021 to 2023, resulting in a demand from the government for over $21,000. This amount included credits, penalties, and interest. As a family with three children who spends more than $12,000 annually on child care, Martins highlighted the significant strain this has placed on their finances, forcing them to use their education savings to cover the owed amounts. “We want TurboTax to take accountability for the fact that they have put thousands of families with children out like this,” she lamented.
In response to inquiries from Global News, the CRA could not provide specific information on the number of audits affecting TurboTax users in Ontario regarding this credit program. Meanwhile, a Facebook group has emerged, consisting of over 100 members who share similar experiences surrounding this issue.
Intuit has denied responsibility for the audits affecting Ontario users of TurboTax. A spokesperson stated, “We are aware of customer feedback regarding the Ontario Childcare Access and Relief from Expenses form.” They contended that the tax software calculates credits accurately, asserting that it relies heavily on user inputs in accordance with CRA requirements.
The company encouraged customers to carefully verify their inputs for accuracy, noting there are modes within the software that some users may not be utilizing. However, this explanation has not alleviated the concerns of dissatisfied customers like O’Shea, who asserts, “Software is software is software. It should arrive at the same answer.”
TurboTax promotes a guarantee of full accuracy in their calculations. Their website states, “We guarantee our calculations are 100% accurate. If you pay a penalty because of a TurboTax calculation error, we’ll reimburse you the penalty and interest.” However, this guarantee has come under scrutiny, especially in light of Intuit’s past legal challenges regarding misleading advertising practices.
Martins also criticized TurboTax’s response, acknowledging a long history of using the software without issues until now. She urged the company to honor its guarantee and provide restitution for penalties and interest incurred by users due to their miscalculations. O’Shea, after reaching out to management at Intuit, reported that the only compensation offered was a refund for the software purchase, which he deemed inadequate to address the penalties incurred.
“They’re battening down the hatches because if they pay one person like me, they’ll have to pay everybody,” he concluded.
Source
globalnews.ca