I saw on one of the links posted for what to expect for 4-5 yrs as far as speech, and one of the things listed was "use the same grammar as the rest of the family." Ainsley and Bea still use a lot of "little kid" grammar. I don't correct it, but if I repeat something back, I use the correct grammar. Like "Them is sitting on the chair", I will say "Yes, they are sitting on the chair". But I don't always correct them, that would be annoying, I think. They often use the wrong form of "to be", or add "ed" to make a verb past tense when that is not correct, stuff like that, or use the wrong pronoun (she when it should be her, for example). How do you all handle grammar?
We handle it pretty much the same way as you. Unless it is so convoluted that it is hard to understand what they are saying, we just model the correct grammar and don't directly correct them. I was a English major, so really bad grammar drives me nuts. But, I actually find some of their common saying really cute. For example, DD still says, "Hold you?" when she wants someone to hold her. She knows the correct way and will say it if prompted. But, it is her cute little "thing" and she knows it!
The same way as you when mine were that age. Now that they are older, I might explain the grammar rules, primarily to counter things they pick up at school, like "me and Janie." They never said that before school, because they never heard it from family.
We do the same thing here - reply with the proper form but don't correct them directly. HOWEVER, I have taken to correcting DH because I don't want "the same grammar as the rest of the family" to be incorrect. If my sons say lay when they mean lie, I will have failed as a mother.
And my twins are your long-lost children! They get into shouting matches about grammar. And yes, they are 2 1/2.