What defines unearned income?

Unearned income refers to money received from sources that do not involve active participation or labor on the part of the recipient. This can include income streams such as interest from savings accounts, dividends from investments, rental income from properties, or capital gains from asset sales. These income types are not derived from employment, self-employment, or direct work performed, but rather from existing investments or assets.

In contrast, the other choices focus on income types generated through work or saving efforts. Money received from paid work or self-employment is considered earned income because it is compensation for active labor. Money saved from previous earnings does not represent new income but rather a retention of resources already acquired, which is also not classified as unearned income. Therefore, the choice that accurately reflects unearned income is the one identifying income from sources other than employment.