Okay, this is one that makes even me stop and double…make that triple check…my usage. Let me be clear – I am not including the “lie” that means to not tell the truth here. I am talking solely about the lie (and lay) that refers to setting or reclining.
First, the easy part – – present tense – – lay requires a direct object but lie does not. So you lie down on the couch (no direct object), but you lay your keys on the table (the keys are the direct object). So, to emphasize the concept, you can lay something down, but people lie themselves down.
Now, here’s where everything goes kerflooie, because lie is also the past tense of lay. *sigh* To help with this, Grammar Girl devised this little cheat sheet, and I love it: