DRS: What is earned income?

 
What is earned income?

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Earned income includes all the taxable income and wages you get from working or from certain disability payments.

Taxable earned income includes:

  • Wages, salaries, and tips;
  • Union strike benefits;
  • Long-term disability benefits received prior to minimum retirement age;
  • Net earnings from self-employment.

Nontaxable Combat Pay election. You can elect to have your nontaxable combat pay included in earned income for EITC. The amount of your nontaxable combat pay should be shown on your Form W-2, in box 12, with code Q. Electing to include nontaxable combat pay in earned income may increase or decrease your EITC.

Examples of Income that is Not Considered Earned:

  • Interest and dividends
  • Pensions
  • Social security
  • Unemployment benefits
  • Alimony
  • Child support.


Content Last Modified on 1/2/2014 9:23:30 AM