It depends. It helps to think of earned income as money you work for, as opposed to passive income like interest, dividends, or rental income if you're not in the business of renting out properties.
The IRS defines earned income as:
- Taxable income you earned as an employee, such as wages, salaries, commissions, and tips
- Profits from operating your business or farm
- Long-term disability pay, if received before the minimum retirement age
- Union strike benefits
The IRS also gives you the option of treating nontaxable combat pay (code Q in box 12 of your W-2) as earned income for the Earned Income Credit (EIC).
The IRS defines unearned income as:
- Taxable income from investment-type income such as taxable interest, ordinary dividends, and capital gain distributions.
- It also includes unemployment compensation, taxable social security benefits, pensions, annuities, cancellation of debt, and distributions of unearned income from a trust.
If you have more questions, please provide more clarification as to what types of income are on your tax return, and exactly where you see it under deductions and credits.
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