2606.What is unearned income?

Unearned income is all income that is not earned income.

  1. Private pensions and annuities;

  2. 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;

  3. 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;

  4. Gifts and inheritances;

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

  6. Prizes and awards;

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

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

    1. Tips under $20 per month;

    2. Jury fees;

    3. Money paid to individuals who are residents, but not employees, of institutions; and

    4. Military pay and allowances, except basic pay.

Last Revised: Nov. 30, 2010