What is active income?

Immigration regulations consider employment to be any type of work performed, or services provided, in exchange for money, tuition, fees, books, supplies, lodging, or for any other benefit while in the U.S.

What constitutes passive income?

IRS publications describe passive income as income in which there was no “material participation” involved, and includes examples such as: income from personal portfolios (pensions, annuities, dividends, etc.); income from intangible property such as patents or copyrights; or rental property income.

However, it is important to remember that other agencies (namely SEVP and USCIS in this case) may look at activities, and income derived therefrom, differently than the IRS does for taxation (see, for example, Wettasinghe v. U.S. Dept. of Justice, I.N.S., 702 F.2d 641 (6th Cir.1983) (distinguishing between investing and employment activities)). 

Does the location of my work activity matter?

Yes. Any activity done outside of the U.S. does not constitute work for F or J visa purposes. Thus, if an individual performs work in another country, any residual, passive income from that work that follows after the individual’s entry into the U.S. is acceptable and does not require F or J visa employment authorization.

For example, an international student who develops an online app while in his/her home country and then receives residual money from that app while in the U.S. on an F or J visa, would be considered as receiving passive income only. Any continuation of active employment while physically in the U.S., however, requires the appropriate employment authorization, regardless of where the company is located or if foreign bank accounts are set up to receive payment for such work. 

In the case of international students or scholars writing articles as part of their academic program, resulting residual income could be permissible if the articles were written as part of program expectations. 

What other factors should I consider when I look at active vs. passive income?

While ISSS cannot speak for the government as to active versus passive employment, there are factors that might be considered, such as the frequency and consistency of the work. For example, donating plasma or selling something online only once may be looked at differently than consistent or more frequent donations/sales. Likewise, the amount of remuneration received may not be as relevant as the time commitment given by the individual. Additionally, when one applies for visa benefits in the future, such as for OPT or other work authorization, USCIS may look at past employment as part of its review and approval process.