Any revenue obtained through a job or self-employment is considered earned income.
Earned income might consist of wages, salaries, commissions, bonuses, and tips.
Investment and government benefit program revenue would not be regarded as earned income.
Taxation on earned income differs from that on unearned income.
Lower-income working taxpayers may be eligible for the earned income tax credit (EITC).
Earned income is defined as any money you receive from work you have performed for an employer or your own business for tax reasons.
Government benefits, such as payments from the Temporary Assistance for Needy Families program (commonly referred to as welfare), unemployment, workers’ compensation, and Social Security, are examples of income that isn’t considered earned income. Disbursements from non-deferred pensions and retirement plans, alimony, capital gains, interest from bank accounts, dividends from stocks, interest from bonds, passive income from rental property, and salaries provided to prisoners who labor in prison are all excluded.