Non-tax income refers to any income that is not subject to taxation. Here are two examples:
1 Interest earned on tax-exempt bonds: Interest earned on certain bonds, such as municipal bonds, is exempt from federal income tax. This means that the income generated from these bonds is not subject to taxation, making it a form of non-tax income.
2 Gifts and inheritance: Money received as a gift or inheritance is not considered taxable income by the recipient. However, the giver or estate may be subject to gift or estate taxes, respectively, if the gift or inheritance exceeds a certain threshold.