United States · Software engineerSabbatical in the United States as a software engineer
For a US engineer the sabbatical question is not visas, it is health insurance and equity. Get those two right and a year off in Austin or Denver is a spreadsheet exercise. Get them wrong and a single hospital bill or a badly timed stock sale eats the whole buffer.
You work in tech in the US, your net worth is heavy in RSUs or ESPP stock, and you want six to twelve months off. You may be staying put or moving to a cheaper city for the duration. You want the insurance and tax decisions laid out before you resign.
Health insurance is the first line in the budget
Leaving a job ends employer coverage. COBRA keeps your exact plan for 18 months at full price, typically $750 to 850 a month for one person in 2026. The ACA marketplace is the alternative: a benchmark silver plan averages $500 to 650 a month at full price now that the enhanced premium tax credits expired at the end of 2025, and the 400% of poverty subsidy cliff is back. With little income during a sabbatical you may qualify for a subsidy, but a large stock sale in the same year can wipe it out retroactively, because the subsidy is reconciled on your tax return. Decide the equity plan and the insurance plan together.
RSUs, ESPP and the year you stop earning
A sabbatical year is a low-income year, and that is a gift for capital gains. Long-term gains are taxed at 0% up to about $49,000 of taxable income for a single filer in 2026, 15% above that, and 20% at the top, plus the 3.8% net investment income tax above $200,000. Selling appreciated stock in a year when you have no salary can put a large gain in the 0% and 15% bands instead of 20% plus NIIT. The trade-off is the ACA subsidy above. Unvested RSUs are forfeited when you leave, so check the vesting calendar and, if a cliff is close, ask for unpaid leave rather than resigning. Your 401(k) is yours regardless; an HSA is portable and stays tax-free for medical costs.
Where to spend the year
Nine states have no income tax on wages: Texas, Florida, Nevada, Wyoming, South Dakota, Alaska, Tennessee, New Hampshire and Washington, though Washington taxes large capital gains at 7%, which matters if you are selling stock to fund the break. California's top rate is 13.3%, 14.4% on wages. Establishing residency in a no-tax state before a large sale is a legitimate strategy, but "establishing" means actually moving, and California audits departures. On cost, Austin rents are down about 15% year on year to $1,250 to 1,500 for a one-bedroom, Denver is $1,500 to 1,700, and San Francisco is $4,200. The same portfolio buys nearly three times the months in Austin.
Re-entry in a cyclical market
Tech hiring swings more than most fields. Budget three months of search, keep your network warm, and keep something shipping publicly during the break: an open-source project answers the gap question better than any cover letter. If you resigned rather than took leave, you are not eligible for unemployment benefit, so the buffer has to come from you. The calculator's "Cut spending 20%" scenario shows how much cheaper it is to extend a break by trimming costs than by selling more stock.
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