Taxpayers and investors alike have expressed outrage this tax season over recent changes made by H&R Block. The company’s “Deluxe” package, a popular choice in recent years, has reduced critical features forcing some users to upgrade to a higher-priced package.

TurboTax Issues $25 Refund to Deluxe Customers

Now, TurboTax is responding to the screw-up by issuing a mea culpa and offering a refund to those affected. If you tried to buy Deluxe and had to upgrade, TurboTax will issue you a $25 refund to stay.

TurboTax is also running a limited-time offer for simple filers to complete their federal and state taxes for $0 using the TurboTax Federal Free Edition. This is the first time they are offering free e-filing for state tax returns. The duration of the offer is unknown, and TurboTax does include a price disclaimer to the offer, stating that “[prices] are subject to change without notice” and that the “offer may change or end at any time without notice.” We have more details on this free offer in our TurboTax discount code post.

The Controversy

Deluxe was updated this year, but the software no longer allows users to electronically file for capital gains and losses, rental real estate, farm income, and self-employment profits and losses. Instead, those who used these features in the past through the Deluxe version will have to file using TurboTax’s “forms” as opposed to the more user-friendly “interview” option, and will not be able to e-file or receive review assistance.

In order to obtain these feature, users are now forced to pay about 50% more to upgrade to TurboTax’s “Premier” or “Self-Employed” packages.

Dissatisfied Deluxe users have been vocal in their reviews of the TurboTax product, and experts suggest that TurboTax did not do enough to communicate the changes to its customers. Many of those customers have made the switch to rival H&R Block.

If you used TurboTax last year, H&R Block will send you a free download of its Deluxe + Slate desktop software. You simply need to send an e-mail to SwitchToBlock@hrblock.com and include your name, address, phone number, operating system, and proof of purchase (either a copy or photo of the receipt).

In an attempt to retain their client base, TurboTax countered by issuing a full apology and the $25 dollar refund. Eligibility for the refund is limited to those who purchased TurboTax Deluxe to file in 2013 and had to upgrade to the Premier or Self-Employed versions for their 2014 return. Applications for the refund must be submitted by April 20, 2015, and taxpayers will only be paid once they have completed their 2014 return.

In another promotional move, TurboTax is also currently offering a special 50% off promotion through Jan. 26 on their Deluxe (now $29.99), Premier (now $44.99), and Self-Employed (now $49.99) products. By making use of that discount, in conjunction with the $25 refund, you can ultimately pay less than you would have even before the price hike.

The Bottom Line

These recent changes and promotions can make navigating the already-stressful tax season even more confusing. While this bad PR move certainly can affect consumer sentiment, it doesn’t take away from the fact that H&R Block and H&R Block are both still the best tax preparation software platforms. To gain further insight or weigh all your options, you can refer to one of our comprehensive tax resources. These guides will help you compare the best tax preparation software and make an informed decision based on your needs and price range.

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