The answer is no. While a trip to the Holy Land may benefit a minister’s ministry, it does not qualify as a tax-deductible business expense under current tax law. Here are the key reasons why:
When Is a Holy Land Trip Taxable?
The church’s payment for a pastor’s Holy Land trip constitutes taxable income if either or both of the following apply:
- The trip is provided to honor the minister for their faithful service to the church.
- The trip is provided to enhance or enrich the minister’s ministry. Although the trip may benefit the minister’s work, it is considered personal travel and not a business expense under the tax code.
The tax code explicitly states that “no deduction shall be allowed … for expenses for travel as a form of education” (IRC 274(m)(2)). This means the church’s payment for the trip, including transportation, meals, and lodging, must be treated as taxable income and reported on the minister’s Form W-2 (or Form 1099-MISC if they are self-employed).
When Can a Trip Be Business-Related?
If the primary purpose of the pastor’s trip is business-related, such as speaking or teaching, then the expenses may qualify for reimbursement under the church’s accountable plan. Determining whether the trip is primarily business-related depends on:
- The length of the trip.
- The proportion of time spent on business versus personal activities.
If the trip meets these criteria, the church can reimburse the expenses as a non-taxable benefit, provided proper documentation is submitted.
FAQs
- Are Holy Land trips ever tax-deductible?
No, unless the trip’s primary purpose is demonstrably business-related and meets IRS criteria for deductible expenses. - What expenses must be reported as taxable income?
All expenses paid for a personal Holy Land trip, including transportation, meals, and lodging, must be reported as taxable income. - How should a church handle reimbursable business travel?
The church should use an accountable plan to reimburse verifiable business-related travel expenses. - What happens if the trip is part business and part personal?
Only the expenses directly related to the business portion of the trip may qualify for reimbursement under an accountable plan.
Churches and pastors should work with a qualified CPA to ensure compliance with IRS regulations and avoid potential tax issues.
For further help navigating any funding of overseas activities by your church, see Chapter 4 of the Church & Clergy Tax Guide.
