The Definition of Unearned Income

Unearned Income

Earned	Unearned
Typically from an employer (i.e. salary) Can also be from your own business (self-employed) You generate income from some type of “work” you have done Annual bonuses Hourly wages Tips Commissions Some royalty payments	Referred to as passive income Interest from checking/savings accounts Capital Gains and Dividends (from stocks) Retirement (e.g. 401K) and Pensions Inheritance or Gifts Lottery or Prizes Rental property income Disability payments Death benefits

Earned vs Unearned Income