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Imagine getting a note like this:
“Our son is 34. He lost his job last spring and moved back into his old room. He’s working again, but he hasn’t offered to chip in, and we’re both retired.
“My husband wants to charge him $800 a month in rent. I’m worried about taxes, and about our relationship. What should we do?” — Marcy
Marcy and her husband, Ken, aren’t real. But plenty of real parents are in their shoes. In 2023, 18% of adults ages 25 to 34 were living in a parent’s home, according to Pew Research Center (1).
And parents are already paying. In a Pew survey published in 2024, 59% of parents of adult children ages 18 to 34 said they’d given a child in that age range financial help in the past year (2).
I’ve been a CPA since 1981. My short answer: Yes, a working 34-year-old should pay his way. But how you set it up matters, because charging a family member for a room can come with tax baggage most parents never think about.
The IRS generally expects rental income to be reported on your tax return. And when a family member pays less than a fair rental price, the IRS treats that as personal use of your home, which can limit what you can deduct (3).
Here are 5 things I’d tell Marcy and Ken.
1. Know what “rent” means to the IRS
If you rent out part of a home you also live in, you generally can’t deduct rental expenses beyond your rental income, according to the IRS (3).
My read: Charge your son $800 a month, and you could have $9,600 a year of rental income to report, with IRS rules limiting the expenses you can deduct against it. Before you set that up, ask your tax preparer how it would be treated on your return.
2. Paying bills instead of rent isn’t a tax dodge
Plenty of adult kids already chip in. Among young adults ages 18 to 34 living with their parents, 65% say they pay for household expenses such as groceries or utility bills, according to a 2024 Pew survey (2).
Handing him specific bills, like the internet or a share of the groceries, is simple to track and gets him carrying real weight.
But don’t assume it changes the tax picture. The IRS says that if a tenant pays any of your expenses, those payments are rental income (4). Ask your tax preparer how your setup would be treated.
While you’re splitting up bills, it’s a good time to see what the household is paying for in the first place.
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3. Put it in writing, with an end date
This isn’t about mistrust. It’s about clarity. Write down what he’ll pay, which bills are his, and roughly how long the arrangement will last.
Agree to revisit it in six months. A date on the calendar turns “someday” into a plan, and it gives everyone a polite way to talk about what happens next.
4. Don’t raid your retirement to cover him
You’re retired. Your savings have to last the rest of your lives, and you can’t go back to work as easily as he can.
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5. If he truly can’t pay, give him a plan, not a pass
Sometimes a kid really is broke. If so, don’t charge him money he doesn’t have. Ask for something else: a budget he shows you each month, a savings goal for his own place, or pitching in on chores.
The point isn’t the dollars. It’s making sure the arrangement moves him toward standing on his own.
My honest take
Ken’s instinct is right. A working adult should contribute. Marcy’s instinct is right, too. The way you do it matters, both for your taxes and for the relationship.
So keep it simple and clear. Have him contribute, check the tax side with your preparer, write down the deal, put a date on it and protect your own retirement first.
Letting a grown child come home is one of the kindest things a parent can do. Making sure he leaves stronger than he arrived is even kinder.
Sources: 1. Pew Research Center; 2. Pew Research Center; 3. IRS; 4. IRS
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