Earned Income

Income derived from active participation in a trade or business, including wages, salary, tips, commissions and bonuses. This is the opposite of unearned income.

Investopedia Says:
Earned income includes any income that a person or company receives for work they have done. If your boss gives you an advance on your next check, this would be considered unearned income because you haven't yet done anything to earn it.

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Revenue recognized on accounting ledgers as earned when the goods or services associated with the revenue are sold or delivered to the buyer. For example, in magazine income accounting, the pro rata value of all copies served, based on the subscription price divided by the total number of issues to be served, is earned income. The value of copies not yet served is deferred income.

Tax term describing ‘sweat of the brow' income, which requires obvious effort on the part of the recipient. This includes all income generated by providing goods or services, especially wages and salaries but also net profit from a trade or business; it is contrasted with income received as Dividends, for instance.

Income from personal services. Earned income generally includes wages, salaries, tips, and other employee compensation. Compensation includes items that can be excluded from gross income, such as lodging, or meals furnished for the employer's convenience. Earned income also includes any net earnings from self-employment. Pension and annuity payments are not included.

Sources of money derived from the labor, professional service, or entrepreneurship of an individual taxpayer as opposed to funds generated by investments, dividends, and interest.

Wages, salaries, and fees are types of earned income that, if below a statutorily determined amount, entitle a taxpayer to a reduction of income tax liability.