US and International Impacts of COVID-19— Mobility Update
It has been another challenging week in the world of mobility and for everyone impacted by the pandemic.
At CapRelo, we want to thank all our customers who have been engaging so closely with us as we find creative and flexible solutions for handling the complexity of these unique times!
Questions on specific cases should continue to be directed to your Client Services contact or to firstname.lastname@example.org.
Internationally— countries around the world are wondering when and how to ease coronavirus lockdowns. The focus remains to continue the restrictions on movement/traffic across borders while lockdown measures are being slowly lifted in some locations and extended in others.
Several countries including Austria, China, Germany, Italy, and Poland have started gradual easing of lockdown restrictions for certain sectors with strict social distancing measures remaining in effect.
- Other countries including France, Mexico, New Zealand, Singapore, South Africa, and the United Kingdom, have extended, or are expected to extend, lockdown periods.
- Companies with employees currently in a foreign country are focusing on upcoming work visa or permit expirations, given the closure of many government immigration offices. Many countries have proactively made provisions for he automatic extension of visas and permits, but each individual case must be reviewed to ensure appropriate action is taken.
- Companies are strongly encouraged to document complete visa or permit information, including expiration date and to maintain records of the steps taken to try and remain compliant.
- Conditions change daily; therefore, we strongly advise monitoring immigration updates. One of our valued partners, Newland Chase, provides updated advisories: https://blog.newlandchase.com/ (updated daily at 7:00am EST and 1:30pm EST).
In the US, President Trump last week unveiled a plan for reopening the economy in several phases based on the severity of the outbreak in each state or region. The guide leaves it up to governors to make the decisions on timing and scope.
- He also issued an executive order on April 22, 2020 temporarily blocking some foreigners outside the United States from settling permanently in the United States by obtaining what is informally known as a “green card.”
- The order applies to requests for permanent residence based on employment in the United States AND requests based on familial ties but contains a number of exceptions.
- The order DOES NOT affect people coming to the United States on non-immigrant visas, including tourists and business travelers. It also does not affect workers such as farm laborers entering the United States on temporary visas or skilled workers on H-1B visas.
- Foreigners already in the United States and seeking to adjust their status will not be blocked by the latest measure.
We are seeing general trends from our supplier partners and clients that are worth noting:
- While a few states plan to reopen some businesses (Georgia, South Carolina, Tennessee and Texas) within the next week, others remain under original or extended stay-at-home orders. As of April 24, 2020, 43 states remain under stay-at-home orders.
- Companies are continuing to restrict business travel and are directing employees to work from home. Communication remains critical to keeping a mobile workforce healthy and well-informed.
US IRS Update
On April 21st, the IRS published Revenue Procedure 2020-27: The United States allows an exclusion from taxable income (subject to limitations) for income earned while the taxpayer’s “tax home” is outside the United States.
- The taxpayer must meet one of two qualifying tests, and both tests require that the taxpayer be present, or reside, in a country outside the United States for a minimum period of time. A mid-assignment relocation or repatriation could cause a taxpayer to fail either or both qualifying tests, resulting in a failure to qualify for the Foreign Earned Income Exclusion (FEIE).
- Revenue Procedure 2020-27 provides a waiver of the time requirements of these qualifying tests for an individual who had reasonably expected to meet them during 2019 or 2020 but failed to do so because the individual departed a foreign country on or after a specified date due to COVID-19-related circumstances.
US IRS Relief Update
Also on April 21, the IRS issued an advance version of Revenue Procedure 2020-20.
- This procedure provides relief for certain nonresident individuals who, but for COVID-19-related emergency travel disruptions, would not have been in the United States long enough during 2020 to be considered resident aliens under the substantial presence test, or would not have become ineligible for treaty benefits in relation to dependent personal services income due to overstaying the time limitation related to such benefits.
- The revenue procedure effectively permits eligible individuals to disregard a period of up to 60 days of presence in the United States when calculating whether they meet the substantial presence test and/or their eligibility under the Dependent Personal Services or Income from Employment article of an income tax treaty, subject to certain conditions.
To access previous CapRelo updates, please visit our resource center:
CapRelo is actively monitoring all cases to determine how moves will be impacted. Our remote workforce and technology solutions remain fully operational; therefore, we anticipate no significant disruption to service fulfillment for our clients and their transferees.
The safety and care of our employees, clients and customers is our highest priority. As circumstances evolve, we will continue to share our observations as it pertains to the relocation landscape.
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LEGAL DISCLAIMER: The statements above are not intended as a substitute for legal and/or tax advice. CapRelo is not responsible for any loss or implication arising from reliance on these statements.