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If your parents live with you and pay you to live there do you have to pay taxes on that income?

William Cain

in Student Loans

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Amanda Johnson on February 9, 2018

The answer to your question is maybe. There are other issues involved. That feeds them? Much of what you will pay for the food? Are you taking a deduction on the part of your home that is rented to them? Sorry, can't answer the question with the information at hand. * Added - If there is an agreement to share the expenses, such as food, utilities, cleaning, and taking care of the house, this is not considered as income. If payment is being made by occupation in place of distribution costs, they must be declared as income. There are two simple tests to determine if your choice in handling this would be acceptable to the Internal revenue Service - 1) there is an agreement, written or unwritten, that they are tenants (as opposed to being invited)?; 2) does the amount of the payment that exceeds the total of their bills? The argument of whether they contribute 50% or even 100% of the expenses may have to be made (if you fear an audit), however not exceeding 100% of the costs of the home should not be a problem in establishing this is simply expense reimbursement. If you have a reason to be worried, make sure to keep your home expense records.


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