Which of the following is considered unearned income?

Unearned income refers to money earned through investments or other sources that do not require active work to generate, as opposed to earned income that comes directly from employment or personal labor. Interest and dividends are the hallmark examples of unearned income because they are obtained from investments such as savings accounts, stocks, or bonds.

In contrast, wages, salary, and commission are classified as earned income because they are directly linked to work performed or services rendered. Wages are typically paid based on the hours worked, salary is a fixed regular payment for employment, and commission is earned through sales performance or meeting certain business targets. Since the focus is on income that does not stem from performing labor but rather from investments, interest and dividends are correctly identified as unearned income.