“Lie” and “Lay” are not hard to tell apart, if you just pay attention. They are two different verbs that mean two different things. Mixing them up is, like “ain’t,” a social marker that indicates a person of little education, limited mental ability or impaired awareness. So do not use “lay” when you mean “lie.” It is an ignorant mistake. Likewise, do not use “lie” when you mean “lay,” not even in the most informal of speech. These two mistakes tell others who know better that you simply do not care about being correct, or do not know how.
Some might think that the confusion exists because the past tense of “lie” is “lay.” This seems unlikely, as those who commit this error seldom use the past tense of “lie,” and probably do not know what it is. More often, you will hear something like “It was just layin’ there.” That’s wrong because the verb is not “lay”; it’s “lie.”
Get this right, now and forever:
“Lie” is to recline, as in “lie in the bed.” It is an intransitive verb. It has no direct object. There is no “lay” in “lie” until you get to the past tense. “Earlier this morning, I lay in bed.” That is correct. The past participle of “lie” is “lain.” It is fairly rare in modern speech. An example might be: “All day the outlaws have lain in wait for the stagecoach.”
“Lay” is to place something, usually on a surface. It is a transitive verb. It needs a direct object. For example: “Please lay your books on the desk.” The past tense of “lay” is “laid,” so it is correct to say or write, “She laid the keys on the table.” The past participle of “lay” is “laid,” the same as its past tense form. It is also fairly rare in modern speech. An example: “I hope we have laid to rest this confusion of ‘lie’ and ‘lay’.”
It is worth noting that “lie” also means to tell a falsehood, but that is a different verb altogether; it is just spelled the same as the “lie” in this post. “Lay” also has an additional meaning, or more correctly, a specific context. It is what hens and other fowl do when they produce an egg. That might help to remind you that “lay” is to place, whereas “lie” is to recline.
“Lie down” is a phrasal verb based on “Lie,” and it means to move from a more upright position to a reclining position. “Lay down” is a phrasal verb that means to put something one is holding in another place. For example, “Don’t be excited; just lay down your weapon.” “Lay up” is also a phrasal verb based on “Lay,” and it means to place something aside for later. “Lay around” is incorrect. That verb should be “lie around,” meaning to relax and do little or nothing. “Lay over” and “lay away” are more phrasal verbs based on “lay.”