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The Pastor's Sabbatical and Tax Implications

How duration, expenses, and compensation need to be handled.

The Pastor's Sabbatical and Tax Implications
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For many churches, offering pastors a sabbatical for a time of refreshment and rejuvenation is common. While churches desire a sabbatical to be both beneficial to the pastors and a blessing, when it comes to taxes, many common practices surrounding sabbaticals create unanticipated adverse consequences for both churches and pastors. Several questions commonly arise from the practice of sabbatical programs offered by churches.

If a church wants to provide a month-long sabbatical to all full-time, credentialed pastors, can the church continue to pay a pastor’s regular salary during the sabbatical?

A sabbatical is generally a vacation and can be offered at will by the church. A sabbatical can be considered “paid” time off and compensation related to the time off is fully taxable. However, the extent of paid time off should be reasonable considering the pastor’s tenure with ...

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Posted:
  • June 28, 2016

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2021 Church & Clergy Tax Guide (Book)
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The most comprehensive and authoritative tax guide available.