Do I have to report patent royalties (which is passive income, like rent) as local earned income tax (EIT)?
In some states, taxpayers have to pay local earned income tax (EIT) to the local taxing authority or township. They say rental income is not taxable but say nothing about royalties which is also a passive income.
In some states like Pennsylvania, taxpayers have to pay local earned income tax (EIT) to the local taxing authority or township. They say rental income is not taxable but say nothing about royalties which is also a passive income.
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Comments
Do not know your state but I would say “no”.
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor
The key here is the word “earned.”
It isn’t “earned income” as taxing authorities define it. so you should be OK.