What Is Unearned Income?

Unearned income is income that you did not work to earn. Unearned income is often important in figuring out if a dependent needs to file a tax return.

Unearned income includes, but is not limited to

  • interest, dividends, and capital gains
  • unemployment compensation
  • taxable social security benefits
  • retirement income (IRA distributions, pensions, annuities)
  • trust distributions
  • income from rental property
  • alimony
  • child support
  • gambling winnings