Our adult disabled child receives SSI and uses some of it to pay us rent to live in our home. Do we owe taxes on the rent that she pays us?

Forum|Forum|1 year ago
February 26, 2025
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She receives the maximum amount of SSI for a person living at home. We charge her the fair market value of what it would cost to rent a room in our home. We do not profit from the rent she pays us, as her share of our actual mortgage payment would be much higher. In addition to the rent, she pays us a monthly amount toward food and utilities. Is the rent she pays us considered taxable income, or is she simply sharing living expenses with us? There is a lot of conflicting information about this topic online and I can't find a specific reference to it in the IRS code.

Best answer by Vanessa A

The IRS makes the determination. However, when a child is paying "their share" of the expenses and you are not trying to make a profit, this is not considered rent. This is simply cost sharing. As you mentioned in your post, this is simply reimbursement for expenses.

If you were trying to make a profit or charging her a Fair Market Rent based on the rent you could get in the area and NOT on the cost of total expenses for your home, then yes, it would be a rental. How it is listed on the SSA form does not determine how it is treated.