Financial companies tend to use a lot of, well, financial jargon. And the last thing any of us need right now is confusing terminology. In an effort to make your life simpler, we’re breaking down 10 common coronavirus-related financial terms you’re probably encountering a lot these days. From adjusted gross income (AGI) to the Paycheck Protection Program, here’s some basic COVID-19 financial vocabulary you should know.
The CARES Act
Signed into law March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act is a $2 trillion economic relief package designed to help people and businesses impacted by the COVID-19 crisis. The initiative provides stimulus payments, extended and increased unemployment benefits, homeowner and renter protection and other provisions to help Americans meet basic needs. (You can read highlights of the bill here.)
Families First Coronavirus Response Act
Effective April 1 through December 31, 2020, the Families First Coronavirus Response Act (FFCRA) provides increased food assistance, free coronavirus testing, and family medical and paid sick leave. It also safeguards Medicaid benefits and, according to the House Committee on Appropriations, “gives states the resources and flexibility to provide unemployment benefits to laid off and furloughed workers, as well as to those workers who exhaust their allotted paid leave.”
Adjusted gross income
Your adjusted gross income, or AGI, is your income after qualifying deductions (also known as adjustments) that determines how much state and federal taxes you’ll pay. You may be hearing this term more right now, as it determines if you’ll receive a stimulus payment, and, if so, how much.
In order to provide Americans with extra money and jumpstart the economy, the CARES Act provides eligible tax-paying Americans with one-time payments. These disbursements — commonly known as stimulus payments, but officially called Economic Impact Payments – will be up to $1,200 for individuals and up to $2,400 for married couples, with an additional $500 per child.
The payments are based on adjusted gross incomes up to $75,000 for individuals and $150,000 for married couples. If the Internal Revenue Service (IRS) already has your bank account information, it will transfer the money to you via direct deposit based on the recent income tax figures from your 2019 or 2018 filing.
Get My Payment tool
Operated by the IRS, the Get My Payment tool enables Americans to check the status of their stimulus check. It also explains payment eligibility requirements, allows you to provide direct deposit information if the IRS doesn’t already have it on file and answers frequently asked questions.
Unemployment benefits provide temporary income to American workers who lose their jobs. Payment, which is based on an individual’s prior wages, is usually paid weekly.
The CARES Act created three new unemployment programs to help those facing COVID-19 economic hardship:
Federal Pandemic Unemployment Compensation (FPUC): increases unemployment benefits to include an extra $600 in federal benefits each week through July 31, 2020.
Pandemic Emergency Unemployment Compensation (PEUC): extends unemployment benefits for an extra 13 weeks.
Pandemic Unemployment Assistance (PUA): expands unemployment insurance eligibility to self-employed workers, freelancers, independent contractors, and part-time workers.
Together, these programs greatly expand unemployment benefits to pay more, and for a longer period of time, than normal. Self-employed workers — including independent contractors and “gig” workers – are also eligible to receive benefits.
Used as a cost-saving measure by employers, a furlough is a temporary, unpaid leave from work. Unlike a layoff, furloughed workers keep their jobs, and some retain health insurance benefits. While laws vary from state to state, furloughed workers are typically eligible for unemployment benefits.
Paycheck Protection Program
Administered by the Small Business Administration (SBA), the Paycheck Protection Program is a loan-granting federal relief program designed to help small businesses (with 500 or less employees) keep workers on their payroll. As long as loans are used for specific expenses — such as salaries, rent, mortgage interest or utilities – and workers are kept on payroll for an eight-week period after the loan is granted, loans will be forgiven in full.
An emergency fund is money, typically kept in a savings account, that’s reserved for emergency use only. The amount can vary per person, or per family, but the emergency-use-only concept is the same. With unemployment rates soaring as the global economy reels from the coronavirus, Americans who have emergency funds are tapping into them. (Unfamiliar with emergency-only savings? Learn how to build an emergency fund in just four steps.)
Online Account Management
With many businesses closed, or with limited in-person customer service options, consumers are being asked to go online to manage their accounts. Many companies offer the ability to manage accounts online, where you can view statements, pay bills and more. (If you’re a OneMain customer, you can log in to your OneMain online account here or via the OneMain mobile app available in the Google Play or the App Store.
A little knowledge goes a long way, especially during challenging times. We’ve built our business on helping people to meet important financial needs and our commitment to the well-being of our customers, employees and community remains unwavering. Please visit OMF.com/HereToHelp for resources that can help you through this crisis.