Am I required to return sabbatical payment if I do not return afterward? I am about to go on sabbatical. I do not know if I want to return to the institution afterward. Our faculty handbook says that sabbaticals are granted with the expectation that faculty return for at least one year. 

Does that mean I am legally required to pay back the money if I don't return, or only morally required to return it? This is in the United States.
You will probably have a contractual obligation for one year. You may even need to sign a document affirming it before you can be paid. Talk to someone at your institution to learn the rules and the consequences of not returning. You might want to find someone outside your department if you don't want to signal your ambivalence. 

You might also consider that any new institution might not be pleased if you step away from an obligation at the old one. No way to be sure, of course.