What is earned income?
by TurboTax • 
Updated December 23, 2025 7:27 AM
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).
Workers' comp, unemployment, and pensions don't count as earned income.
