TurboTax will pay $141 million to 4.4 million taxpayers who were charged for tax preparation that should have been free.
The settlement applies to taxpayers who were eligible to use TurboTax's IRS free file program for tax years 2016, 2017, and 2018.
Households with adjusted gross incomes up to $73,000 are eligible for free online tax preparation services through the IRS Free File Program.
The settlement comes after an investigation found that Intuit paid for online search ads that confused some customers, leading them to TurboTax's paid service.
The settlement covers taxpayers in all 50 states and Washington, D.C.
The IRS is considering the creation of a government-run tax prep option, but this will require intense legislative and political effort.
H&R Block and TurboTax still offer limited free filing for low-income taxpayers directly on their sites.
Free tax prep services remain underused, with just 3.2 million of the roughly 100 million eligible households using Free File last year.
Households with adjusted gross incomes up to $60,000 can also get free basic tax return help through the IRS Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs.
Filing a tax return can lead to money back, not just for federal returns but also for credits on state returns.