Earned income

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Earned income is money you receive from:

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

This type of income is subject to FICA tax so it is taxed at one of the highest rates for income tax purposes. Unearned income includes income from investments and is not subject to the FICA tax.