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

Answer 1

The answer to your question is Maybe. There are other questions involved. Who feeds them? How much of what they pay goes for food? Are you taking a deduction on the part of your house you are renting to them? Sorry, I can't answer the question with the information at hand.

* Added - If there is an agreement to share in expenses, such as food, utilities, cleaning, and care of the home, this is not considerd income. If payment is being made for occupancy rather than expense sharing, it is should 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) Is there an agreement, written or unwritten, that they are renters (as opposed to being guests)?; 2) Does the amount of payment received exceed the total of your bills for expenses? The argument of whether they contribute 50% or even 100% of the expenses may have to be made (if you fear an audit), however so long as it does not exceed 100% of household expenses there should not be a problem in establishing this is simply expense reimbursement.

If you have a reason to be concerned, be sure to maintain your household records for expenses.