What is unearned income?

Unearned income can be thought of as "passive" income that doesn't involve active work or a business activity, such as:

• Interest, dividend, or investment income
• Retirement or Social Security income
• Alimony or child support
• Unemployment or workers' comp
• Gifts, prizes, awards, or winnings
• Inheritances
• Income received while incarcerated, even if it involves active work
• Rental income (for a rental property in which you do not provide substantial services primarily for your tenant's convenience)