Definitions:
Earned income - is received from services performed. For example, wages, commisions, tips, and business income.
Unearned income - is generally income that the does meet the definition of earned income. Examples include interest, dividends, rents, and royalties. Pensions and IRA distributions would fall into this category.
Retirement benefits, such as pension or Social Security payments, are generally considered earned income because they are often a result of a person's work experience and contributions throughout their career.
No, you earned it and it has been put aside for you.
No. Social Security and Pension income are not considered earned income for the purposed of the Earned Income Tax Credit. This is not to say that you will not have to file an income tax return and possibly pay taxes. Depending on the amount of income you have and your filing status, you may or may not have to file a return.
NO. Pension income would NOT be a QUALIFIED EARNED INCOME for contributions to a IRA account.
Do I have to pay FICA and medicare tax on my pension if I retire early at age 55 and not working?No. A pension, like IRA and 401k distributions, is not considered earned income. You do pay income tax, but not FICA (Social Security and Medicare), on those sources.
Do I have to pay FICA and medicare tax on my pension if I retire early at age 55 and not working?No. A pension, like IRA and 401k distributions, is not considered earned income. You do pay income tax, but not FICA (Social Security and Medicare), on those sources.
Yes.
Retirement distribution amounts that a taxpayer receives during the year is NOT earned income for the year. The amounts are retirement benefits.
Yes, pension benefits are considered income when calculating Social Security benefits. Depending on the amount of pension received, it could potentially impact the amount of Social Security benefits you are eligible to receive.
Medicare tax is paid on earned income.
Yes.
Yes, babysitting is considered earned income. You must be 25 or older