What is unearned income?

Unearned income is taxable interest, ordinary dividends, capital gain distributions, unemployment compensation, taxable social security benefits, pensions, annuities, distributions from trusts, alimony, child support, and payment for work while an inmate in a penal institution. You can receive money in many forms such as checks, cash, property and/or services.

Taxable income includes unearned and earned income such as Wages, Ordinary dividends, Qualified dividends, Taxable refunds, credits, or offsets of state and local income taxes, Alimony, Business income or (loss), Capital gain or (loss), Other gains or (losses), IRA distributions, Pensions and annuities, Rental real estate, royalties, partnerships, S corporations, trusts, etc., Farm income or (loss), Unemployment compensation, Social Security Benefits, and Other Income.


The following statements are taxable unearned income forms.
  • SSA-1099 (Social Security)
  • RRB-1099 (Railroad Retirement Benefits)
  • 1099-R (Retirement)
  • 1099-G (Government Payments)
  • 1099-INT (Interest)
  • 1099-DIV (Dividends)
  • 1099-B (Bonds)
  • 1099-S (Stocks)

You must still file an income tax return even though you solely receive this type of income. Additionally, your gross income is the combination of both types of income.

Leave a Reply

Your email address will not be published. Required fields are marked *