I just started a new job, and my employed has offered to pay my first 6 months rent. We are wondering what is the best way to go about this from a tax stand point. Any input?

It will depend on how the employer reports the rent.

If they include it in your W-2 total wages, salary, or tips, then you don't have to do anything special. Just file as you normally would.

If they report it in some other way, like a 1099, you will have to follow the instructions for filing with the form they use to report the income.

If they don't include in your wages, or report on another form, hummmmmmmmmm?

Is there any legal way that they can pay my rent without it being taxed?

I'm sure they could, somehow?

They would be required to report it as income of some type just like an incentive bonus, or commission check unless they could consider it a business expense and not necessarily as a payment or income to your benefit.

I had an apartment furnished by an employer once. It was not my residence, only used when required to travel to that City. The lease was in the company name, not mine, and I never had to account for any of the rent as income.

I just started a new job, and my employed has offered to pay my first 6 months rent. We are wondering what is the best way to go about this from a tax stand point. Any input?

It will be your taxable income unless it is a temporary location and you are also maintaining your main home.
Then it depends upon how the employer reports the income. It you get W2 or 1099-Misc. If it is 1099-Misc income, you will also pay SE tax at 15.3%. But the advantage is that you can deduct your expenses directly on schedule C than through itemized deductions.

Read W2 vs 1099-Misc; Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor. (http://taxipay.blogspot.com/2008/03/w2-or-1099-employee-or-independent.html)

MOST of the time, such payments are considered to be taxable compensation.

However, if you are living on the premises of the job location (say in an apartment that is in the office park where your employer is located) and such living arrangements makes you available 24/7 for work, then your rent would be considered tax-free.

What your employer can do is "gross up" the payment. This is common in relocations. The employer pays you an amount calculated to cover the taxes on the income.