Revision 09-4; Effective December 1, 2009

There are two major types of income:

  • Unearned
  • Earned

Income, whether earned or unearned, is received in either of two forms:

Cash — Currency, checks, money orders or electronic funds transfers (EFT), such as:

  • Social Security checks;
  • unemployment compensation checks; or
  • payroll checks or currency.

In-kind — Noncash items such as:

  • real property (including shelter);
  • food; and
  • noncash wages (for example, room and board as compensation for employment).

Income, whether cash or in-kind, is received in either of two ways:

Fixed — Income received on a regular, predictable schedule (usually monthly) and for the same amount each month, such as:

  • Social Security checks;
  • VA checks; or
  • state retirement checks.

Variable — Income that is either received on a varying schedule or for different amounts, such as:

  • payroll checks or currency;
  • monthly bank interest; or
  • gas production checks.

E-1310 Relationship of Income to Resources

Revision 09-4; Effective December 1, 2009

In general, anything received in a month, from any source, is income to a person, if it meets the person’s needs for food and shelter. Anything the person owned prior to the month under consideration is subject to the resource counting rules.

An item received in the current month is income for the current month only. If held by the person until the following month, that item is subject to resource counting rules.

Exceptions: Occasionally, a regular periodic payment (for example, wages, pension or VA benefits) is received in a month other than the month of normal receipt. As long as there is no intent to interrupt the regular payment schedule, consider the funds to be income in the normal month of receipt.

A lump sum payment is income in the month of receipt and is a resource thereafter.

E-1320 Fiduciary Agent

Revision 09-4; Effective December 1, 2009

An action by a fiduciary agent is the same as an action by the person for whom the fiduciary agent acts.

  • Monies received by a fiduciary agent for another person are not income to the fiduciary agent. If the fiduciary agent is authorized to keep part of the money as compensation for services rendered, the compensation for services rendered is unearned income to the fiduciary agent.
  • Monies received by a fiduciary agent for another person are charged as income to the person when the monies are received by the fiduciary agent.

E-1330, Income Treatment of Virtual Currencies

Revision 24-4; Effective Dec. 1, 2024

Convertible virtual currency is a digital currency with an equivalent value in traditional currency. Convertible virtual currency, also known as cryptocurrency, is very similar to cash. It can be traded between people, used to purchase goods and services, or exchanged into either traditional currency or another virtual currency. Bitcoin is an example of a convertible virtual currency.

Convertible virtual currencies are considered either earned or unearned income when they can be easily exchanged into a currency with legal tender status, such as U.S. dollars, or otherwise used to meet a person's food or shelter needs. The U.S. dollar value at the time the virtual currency is received is countable income.

Convertible virtual currency is treated as earned income when the currency is:

  • paid in exchange for work when an employer and employee relationship exists;
  • paid as a royalty or honorarium that is considered earned income; or
  • earned because of valid self-employment.

Note: Virtual currency mining or staking is considered self-employment when done as part of a trade or business.

Note: Creators of non-fungible tokens (NFTs) may receive royalties. These royalties may be treated as earned or unearned income, depending on if the person is engaging in a trade or business.

If the receipt of convertible virtual currency does not meet any of the above conditions, treat it as unearned income. It is subject to the same possible exclusions, such as the infrequent or irregular income exclusion.

Virtual currencies purchased with a person's existing funds, either digital or non-digital, are a conversion of resources and not income.

Related Policy:

Types of Earned Income, E-3100
Sources of Earned Income, E-3300
Self-Employment Income, E-6000
Infrequent or Irregular Income, E-9000
Convertible Virtual Currency and Other Digital Tokens, F-4173