This is what the IRS says.
This is what the IRS says
You don't include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met.
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The meals are:
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Furnished on the business premises of your employer, and
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Furnished for the convenience of your employer.
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The lodging is:
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Furnished on the business premises of your employer,
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Furnished for the convenience of your employer, and
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A condition of your employment. (You must accept it in order to be able to properly perform your duties.)
It wasn’t clear to me who was providing what benefits in your question. If you are living with a relative who is providing free room and board and additional cash, that can just be treated as a family gift and gifts are not taxable.
If you are getting cash from a relative, and living free with an unrelated person in exchange for performing work for them, then the gift from the relative is not taxable and the free room and board is not taxable if you meet the conditions from the IRS. Basically, this is a job that requires you to work at a specific place and live in a specific place in order to perform the job.
or, if you are living with the relative and getting cash from the relative but the relative wants to consider it a job rather than a gift, then it is still not taxable under those IRS rules. (The difference being, if the relative is filing a business tax return, they may be able to deduct the value of your housing as a business expense if it is considered a job and you are providing services for the business. This affects your relatives’s tax returns, it does not affect your tax return.)
