2136.What is “unearned income”?

“Unearned income” is all income that is not earned. Some common types of unearned income are:

  1. In-kind support and maintenance (food or shelter) given to an individual or received by an individual because someone else paid for it (see §§2140-2142);

  2. Private pensions and annuities;

  3. Periodic public payments such as Social Security benefits, Railroad Retirement benefits, Department of Veterans Affairs pension and compensation payments, civil service annuities, workers' compensation, unemployment compensation, and payments based on need involving Federal funds;

  4. Life insurance proceeds and other death benefits, to the extent that the total amount is more than the expenses of the deceased person's last illness and burial paid by the individual;

  5. Gifts and inheritances;

  6. Support and alimony payments in cash or in-kind;

  7. Prizes and awards;

  8. Dividends and interest;

  9. Rents and royalties (except those royalties defined as earned income); and

  10. Certain payments not considered wages for Social Security purposes:

    1. In-kind payments to certain agricultural workers;

    2. Tips under $20 per month;

    3. Jury fees;

    4. Money paid to individuals who are residents, but not employees, of institutions.

Last Revised: Feb. 24, 2009