What term describes the income from sources not directly related to employment?

The correct term for income from sources not directly related to employment is unearned income. This type of income typically includes money earned from investments, interest, dividends, rental properties, and similar financial avenues. Unlike earned income, which is generated through work or active participation in a business, unearned income arises without direct involvement in generating that money.

For example, if an individual receives dividends from stocks or rental income from property they own, these are considered unearned income because they do not involve a direct exchange of labor or services. Understanding this distinction is vital for accurately addressing different types of income on tax returns and for financial planning purposes.