Boomerang Kids

Boomerang kids are adult children who have moved back into a parent's home after living independently. The word describes the trajectory rather than the living arrangement: the defining feature is the return, not the address.

The term comes from Pew Research Center, which titled a March 2012 report "The Boomerang Generation" and devoted a chapter of it to "Who are the Boomerang Kids?" That report, based on a survey of 2,048 adults fielded December 6 to 19, 2011, found that 24% of adults aged 18 to 34 had moved back in with their parents in recent years after living on their own because of economic conditions. The figure is old and should not be used as a current one, but the label stuck.

It is worth separating from the two things it is most often conflated with. First, a young adult who has simply never moved out has not boomeranged, and the much larger statistics in circulation about young adults living with parents count both groups together. Second, a household consisting of a parent and an adult child has two generations in it, and the Census Bureau's definition of a multigenerational household requires three or more, so this arrangement is not multigenerational.

The two statistics, and why quoting the wrong one overstates the phenomenon. Pew's 2012 report kept the two apart on purpose. It found that 24% of adults aged 18 to 34 had moved back in with their parents in recent years after living on their own because of economic conditions, and it split the older band into its parts: among adults aged 25 to 34, 12% were living with their parents at the time of the survey, while a further 17% said they had moved back home temporarily. Pew's January 2024 report on parents and young adult children measured the other thing, reporting that "among those ages 18 to 24, 57% are living in a parent's home, compared with 53% in 1993," a comparison Pew drew from Current Population Survey data. That 57% is co-residence: it counts every young adult at the address, whether or not they ever left. Pew's own 2011 survey is the illustration, having found that of the 40% of 18- to 24-year-olds then living with their parents, the vast majority said they had not moved back because of economic conditions. So a source that presents a co-residence share as a boomerang rate is describing a different population. Every figure here is a measurement of specific ages in a specific year, and none of them is a standing fact about how many adult children move home.

What actually changes hands, measured. In two Pew surveys fielded from October 24 to November 5, 2023, among young adults aged 18 to 34 living with a parent, 65% said they paid for household expenses such as groceries or utility bills, 46% said they contributed money toward the rent or mortgage, and 72% contributed in at least one of those ways. So the common picture of an adult child contributing nothing describes a minority of the arrangements. The two sides evaluate the result asymmetrically, though: 64% of the young adults said the living arrangement had a positive effect on their own financial situation, while only 27% of the parents said the same about theirs, and 55% of those parents said the effect on their finances was neither positive nor negative. Read together, those numbers describe a transfer that is large for one side and, in the parents' own assessment, mostly neutral for the other.

The health coverage rule, stated precisely, because three parts of it are routinely got wrong. The Public Health Service Act provides that "a group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children shall continue to make such coverage available for an adult child until the child turns 26 years of age." Three things follow. The obligation attaches only to a plan that already offers dependent coverage, so it does not require any plan to add it. It does not reach a grandchild: the same subsection says nothing in it requires such a plan to make coverage available for "a child of a child receiving dependent coverage." And it has nothing to do with tax dependency, which the statute makes explicit in its own rule of construction: nothing in the section modifies the definition of "dependent" as used in the tax code with respect to the tax treatment of the cost of coverage. An adult child can be on a parent's plan and file an entirely independent tax return.

Whether the parent gains anything on the tax return, which is usually no. An adult child past the qualifying child age limits can only be claimed under the qualifying relative test, which requires the parent to provide over half the child's support and requires the child's own gross income to stay under $5,300 for the year. An adult child who is working at all normally fails on income. The head of household filing status is a separate question with its own conditions, on its own page, and it is not unlocked simply by having someone living in the house.

Charging rent, and the question that decides the tax answer. Money an adult child hands over toward groceries, utilities and a share of the housing cost is household cost sharing. Renting part of the home to them at a market rent is a different arrangement, and the tax rules for renting property then apply. That distinction has a real consequence: IRS Publication 527 states that where property is not rented to make a profit, the income must still be reported, on Schedule 1 of Form 1040, while the rental expenses are not deductible. Which of the two an arrangement is depends on what it actually is rather than on what it is called, and the question is worth settling before the return rather than after it.

What it costs the parent. The direct costs are food, utilities and insurance, which are small relative to the housing cost that would exist anyway. The larger costs are the ones that do not appear as spending: a room that is no longer available to rent, a house that is not downsized, a retirement date that moves. Those are opportunity costs and they are the reason the arrangement can be materially expensive for a parent whose additional cash outlay is modest. Where the parent is simultaneously helping an aging parent of their own, the combined pressure on retirement saving is the subject of the sandwich generation page.

Putting the arrangement on a footing that survives the first six months takes three decisions, and all three are easier before the move than after it. What the adult child contributes, and to what. How long the arrangement is expected to last, or what event ends it. And what happens to anything that looks like a loan, which needs recording as either a gift or a debt while everybody still agrees what it was.

A hypothetical shows why the contribution question is worth answering with a number. Suppose an adult child moves home earning $3,400 a month after tax, and the household agrees on $600 a month toward groceries, utilities and the general cost of an extra person. Over eighteen months that is 600 x 18 = $10,800 to the household. If the child had instead rented a room elsewhere at $1,300 a month, the eighteen months would have cost 1,300 x 18 = $23,400, so the arrangement saves the child 23,400 - 10,800 = $12,600 over the period, or $700 a month.

The parent's side of the same arrangement is not the mirror image. The parent receives $10,800 and spends some of it on the additional food, utilities and insurance the extra person generates. If those run to $350 a month, the parent's net cash position improves by (600 - 350) x 18 = $4,500 over the eighteen months. That is a real number, and it is far smaller than the child's $12,600 saving, which is one reason the two sides describe the same arrangement so differently. It also says nothing about the costs that never show up as cash, such as a delayed downsizing.

What the arrangement makes possible

• It converts the largest line in a young adult's budget into a much smaller one, which is what makes debt payoff or a down payment reachable.
• It provides a landing place after a layoff, an illness or the end of a degree, at the moment when the alternative is high-rate credit.
• Most adult children at home contribute something, so the household usually gains some income against the extra cost.
• The parent keeps a relationship and a set of hands in the house, which many parents value independently of the money.

The honest costs

• The parent's real cost is mostly opportunity cost, which does not appear as spending and is therefore easy to overlook: a delayed downsizing, a room not rented, a retirement date that moves.
• An open-ended arrangement with no agreed contribution and no end condition is the version that generates conflict, and it is the default version.
• Supporting an adult child at home rarely produces a tax benefit for the parent, because an adult child who works usually fails the income test for dependency.
• Charging a market rent for part of the home changes the tax analysis and can produce reportable income without deductible expenses.
• It can slow the child's own progress toward independent housing if the saving it produces is never directed at anything.