BY Margaux Buridant Vice President, Senior International Wealth Strategist, Bank of the West

Mar 10th 2021

International Perspectives

How to Navigate Life as an International Worker during COVID-19

Here are six ideas for expats to consider in the current job and economic climate.

Mar 10th 2021

The COVID-19 pandemic plunged the world into a state of uncertainty, but even as we begin to recover, international workers in the United States face an even more complex set of challenges.

While some countries provide unemployed workers with government benefits of up to 80 percent of salary for as long as two years, that is not the case in the US. To make matters worse:

  • US unemployment insurance and stimulus payments may not apply to international workers with certain visas.
  • If an international worker loses his or her job, it’s likely that health insurance benefits will also be lost.
  • International workers with certain visas (e.g., H1-B or E2) may have to leave the US within 60 days if they are laid off.

So, how can you increase peace of mind and help protect your family in such an uncertain time? Here are six steps you can take right now.

  1. Check Your Emergency Fund

    It’s always a good idea to have six months’ worth of cash to get through hard times. But until travel restrictions end, you may find yourself unable to access funds held in foreign accounts. Make sure to transfer the funds you anticipate needing well in advance.

  2. 2020 Federal Taxes are Due May 17th

    This year, the US federal tax deadline has been extended to May 17th, 2021, giving taxpayers more time to navigate the difficult circumstances that have resulted from COVID-19. Not all states have aligned state tax deadlines to federal guidelines, so it is important to check your own state’s tax website or talk to your tax advisor to confirm.

    Impacts from COVID-19 may compel you to reconsider your overall tax strategy, and notably if you left to quarantine in your home country, you could see major tax and visa implications. An advisor may be able to help you find additional deductions or credits.

  3. Optimize Your Investments

    After experiencing the recent period of increased stock market volatility, you may wish to speak to your financial advisor to explore a different mix of stocks and bonds, or you may find opportunities to adjust your portfolio to minimize exposure to the estate tax, which can be especially steep for international residents.

  4. Designate a US Guardian in Your Will

    If something should happen to you and your children’s only legal guardian resides outside the US, a traumatic legal custody battle could emerge, especially in light of current travel restrictions. Make sure that your will and other estate planning documents have clear instructions that outline your wishes for the care of your children. Perhaps, explore having an interim plan naming a US guardian who can take control immediately and ensure a smooth transition to overseas guardians.

    In addition, consider naming a legal proxy to authorize health and financial decisions on your behalf in case you become ill for an extended period. And double-check to ensure there are named beneficiaries for all your bank accounts, so your loved ones don’t have to go through the US probate courts.

  5. Get Added Protection with Term Life Insurance

    Because term life insurance policies are only in force for a set period of time, they can deliver high payouts with low premiums. And term life insurance payouts may not subject to estate tax for those that are domiciled outside of the US.

  6. Review Exit Tax Requirements

    If you’re considering an earlier departure from the US than you anticipated, it’s a good idea to remind yourself of the potential tax implications, and give yourself time to plan accordingly.

Don’t Hesitate to Ask for Help

We all have thousands of things on our minds, and every added concern can feel overwhelming. Please feel free to reach out to us at Bank of the West. With partners in 72 countries, we can help arrange international fund transfers; put you in touch with tax, insurance, and estate experts; and share best practices from other international clients.

International workers have been key to every stage of growth in the US and recovery from every type of crisis. Now, more than ever, we appreciate your contributions, and we’re here to help.

Disclosures

All content provided on the Bank of the West Blog is for informational purposes only. It is not financial, investment or tax advice. If you need financial, investment or tax advice, you should contact a qualified professional.

To comply with the Internal Revenue Service and other applicable tax practice standards, any tax information and advice contained in this blog is not intended or written to be used, and may not be used, for purposes of avoiding tax penalties imposed under the United States Internal Revenue Code or for the purpose of promoting, marketing or recommending to another party any tax-related matters

Bank of the West, including any of its affiliates and subsidiaries, does not provide tax or legal advice. Please consult your tax or legal advisors to determine how this information may apply to your own situation.

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